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Survey: Financial Security Increases, But Remains Lower Than Previous Year

Survey: Financial Security Increases, But Remains Lower Than Previous Year

Americans' financial security has risen from last month, but consumers still do not feel as financially comfortable as they did a year ago, according to Bankrate.com's recent Financial Security Index.

In a release, the company said the overall Financial Security Index increased

Americans' financial security has risen from last month, but consumers still do not feel as financially comfortable as they did a year ago, according to Bankrate.com's recent Financial Security Index.

In a release, the company said the overall Financial Security Index increased from December's level of 95.8 to 97.3, which is its highest level since June's 97.8. However, readings below 100 mean that the index is lower than the year before, Bankrate said.

"Each of the components - job security, savings, debt, net worth and overall financial security - improved over the past month," Greg McBride, Bankrate.com's senior financial analyst, said in the release. "This corresponds with a broader trend of positive economic data in recent weeks. But the overall Financial Security Index is still showing a decline versus one year ago, so ample room for improvement remains. The negative sentiment is highest among retirees and lower-income households."

The study, which was conducted by Princeton Survey Research Associates International (PSRAI) found that the overall financial situation for Americans remains negative, with 28 percent calling their position worse than last year and only 23 percent saying it had improved. Overall, though, that gap has been steadily decreasing each month since October, meaning more people are seeing financial improvements. Still, only 12 percent of retirees said that their financial situation had improved over the prior year, the survey found.

Despite the fact that financial security remains below the level from a year ago, the unemployment rate has fallen nearly a full percentage point to 8.5 percent and jobless claims have dipped substantially, according to the Labor Department. Bloomberg reported applications for unemployment insurance payments fell to 352,000 in the week that ended January 14, the lowest level since April 2008.

In terms of the holiday shopping season, which provided an end-of-year boost for the national economy, 56 percent of Americans surveyed said they spent about what they expected to this year, with 24 percent noting they spent less than anticipated. Not surprisingly, households with incomes less than $50,000 and people under 30 were more likely to say they spent less than expected on holiday shopping.

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