SAN FRANCISCO–The Money Anxiety Index skyrocketed 30.2 points in April as Americans showed their increasing concerns about their finances as the COVID-19 crisis continues.
This is the highest one-month jump ever since the index started tracking money anxiety in January of 1959, according to Dr. Dan Geller, behavioral economist and the developer of the Money Anxiety Index. Geller said the acceleration in the level of money anxiety is even greater than it was during the financial crisis of 2007/09, when the largest increase in the Money Anxiety Index, month over month, was 9.4 index points.
“The record jump in the April Money Anxiety Index is also on indication that the damage to the economy is much greater than we think,” said Geller, pointing to his Theory of Money, which states that for every increase in the level of financial anxiety there is a decrease in the amount of personal consumption.
What that means, he added, is that personal consumption is going to decrease even further, pushing the U.S. economy deeper into a recession.
"We are now in a money anxiety Catch 22," said Geller." The higher the money anxiety gets, the lower the level of personal consumption, and since 70% of the U.S. economy is made up of consumption, the U.S. economy will not recover until the level of money anxiety goes down."