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Yahoo
a day ago
- Business
- Yahoo
Optimism for the future is fading as consumer confidence crumbles: 9 facts from new report
HONOLULU (KHON2) — Consumer confidence is sliding, and fast. According to a latest report on the Economic Index, confidence dropped 27% between May 2024 and May 2025. That's the sharpest year-over-year decline since the end of 2020. People are more stressed about money, less sure they'll keep their jobs and much less likely to make big purchases. 'This 27% decrease in consumer sentiment over the past year is a worrying sign that our economic recovery may be stalling,' said Chip Lupo, a analyst on the report. 'People who have low financial confidence are likely to spend less money, make fewer large purchases, and pay down less debt than people with high confidence. As a result, when consumer sentiment experiences a significant decrease, that is negative for the economy.' Here's are nine takeaways from the report. The report indicates that people are holding on to their money. The chances someone will buy a car in the next six months dropped by more than 32%, according to the report. Buying a home? That's down nearly 30%. Even making any large purchases is down by almost 22%. That affects industries from real estate and auto sales to tourism and retail. Stress about money increased in the last year, the only index category to go up, said the report. It's a small rise, just under 2 %; but it still matters. The more people worry about money, the less likely they are to take risks or make purchases, said the report. For businesses that rely on visitors, like those in Hawaiʻi, that can mean less traffic and lower sales. Confidence in job security took a 16% hit this year, according to the report. That's the steepest drop since the pandemic-era uncertainty of people feel less secure in their work, they tend to spend less and save more. That slows down the economy even further, said the report. How will finances look six months from now? The report found that people are far less hopeful. That optimism dropped almost 14% since last May. It's the biggest drop in future financial outlooks in nearly five years. Even though optimism ticked up slightly from April to May, it's still nearly 10% lower than last year, the report said. Don't let short-term changes cloud your judgment. The long-term trend is clear. Financial confidence is shrinking, and people are becoming more cautious. Only about 2.7 out of 5 consumers feel employment opportunities are 'abundant', the report revealed That number is nearly 10% lower than it was in May 2024. This affects how people feel about relocating for work, investing in new skills or education or even switching industries, said the report. Debt reduction confidence fell by more than 3%. That might not sound like much; but in an economy where credit cards, student loans and mortgages are already weighing heavily, it's not a good sign. Confidence in credit scores fell 10%, according to the report. That may reflect how hard it is to pay bills, keep up with interest, or qualify for better rates. Without strong credit, access to new housing, cars or loans becomes even more limited. This isn't just about what people are buying at home. In places like Hawaiʻi, where tourism drives the economy, this kind of nationwide shift hits hard, said the report. If visitors feel insecure about jobs, finances or debt, they're less likely to book big trips or spend freely once they arrive. You can click here to read the full report. Get news on the go with KHON 2GO, KHON's morning podcast, every morning at 8 Economic trends are more than numbers. They're about people, what they hope for, what they fear and how they make decisions. As consumer confidence dips, every choice counts. Whether you're spending, saving, or traveling, the best decisions start with awareness. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
25-04-2025
- Business
- Yahoo
Top 9 warning signs the economy's in trouble: What that means for you
HONOLULU (KHON2) — If you feel more worried about money than you did last year, you're not alone. A new report shows that Americans are losing confidence in the economy, their wallets and even their future. According to a new study on the Economic Index, consumer confidence dropped nearly 8% between April 2024 and April 2025. That means more people are stressed about their finances, less likely to make big purchases and more uncertain about what lies ahead. This isn't just about numbers. It's about how people are living day to day, what they're buying, what they're skipping and how hopeful they feel. 'We're seeing a real slowdown in how people feel about their money,' said Chip Lupo, an analyst from the study. 'That can hurt the economy in a big way.' The index is based on how people answer questions about things like jobs, debt, spending and savings. And this year, those answers show a clear pattern: less confidence, more stress. So, what exactly is going on? And what should you watch for? Here are the top things to know about the latest drop in consumer confidence. When confidence drops, so does spending, especially on big-ticket items. Consumers are thinking twice before committing to major expenses like cars, home renovations or electronics. Even necessary upgrades are being delayed. With economic uncertainty looming, people are prioritizing essentials and holding on to their cash. This pullback in spending can create a ripple effect that slows down businesses and weakens the broader economy. Whether it's a car, a new appliance or a dream vacation, people are backing away from spending on these big-ticket items. The likelihood of making a large purchase dropped nearly 10% this year. Auto-buying plans dropped even more by 13.4% lower than last year. That's a big deal for industries that rely on consumer demand to grow, especially when combined with falling home-buying interest, the tariff war that's tanking the economy and economic retaliation both from within and without the United States. The percentage of people who plan to buy a home in the next six months dropped by more than 10%. That reflects a tough market that includes high prices, interest rates and uncertainty make people hesitate. Even though some real estate markets are seeing more listings or price adjustments, the emotional math of buying a home just doesn't add up for about personal finances in the next six months dropped 4.5%. That means more people expect their money situation to stay the same or get worse rather than improve. This might explain why people are avoiding debt, skipping big purchases and cutting back where they can. Stress about money went up 1.8% since April 2024. That might not seem like a huge jump, but it reflects a steady climb and adds up over time. When people feel anxious about their financial security, they may delay everything from home repairs to healthcare to school payments. It can make life feel like it's on hold. Confidence in debt reduction fell by 3.9%. If fewer people believe they'll reduce their debt in the next six months, it could be a sign that many are already stretched thin. Paying off debt takes extra income, discipline and a stable outlook. But if prices are high and incomes feel uncertain, that hope starts to fade. The share of people who think their credit score will go up in the next six months dropped by 2.8%. That's important, because a good credit score opens the door to better loan terms, lower interest rates and more opportunities. This drop may signal that people expect to use credit more or fall behind on payments. Not all of the news is gloomy. A few areas in the report index show improvement. More people (+0.7%) say they're confident they'll have a job in six months. And even more (+3.7%) feel there are 'abundant' job opportunities right now. That could help keep the economy moving if wages and job quality match people's needs. Oddly, some people feel slightly more positive about their finances right now compared to a year ago. That's a 0.9% uptick, but it doesn't match the bigger drop in future optimism. It's like standing on a shaky bridge: you're still standing, but you don't know if you'll get across. The study's Index isn't just about feelings. It tracks how likely people are to spend, save, invest and borrow. And when those numbers dip, it affects everyone. When confidence goes down, so does spending. And when spending slows, businesses feel it. They may hire less, produce less or even cut back; and this continues a cycle that makes people even more cautious. A nearly 8% drop in consumer confidence doesn't scream panic, but it's a red flag. The economy is built on people feeling secure enough to take financial risks. Right now, more people are pulling back. You can read the full . Get news on the go with KHON 2GO, KHON's morning podcast, every morning at 8 How they feel next month, or six months from now, could shape what happens next and not just in the market, but in everyday life for millions of families across the country. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
14-02-2025
- Business
- Yahoo
U.K. drops AI safety focus and signs up Anthropic to help transform public services
The United Kingdom has signed a major deal with the U.S. firm Anthropic, and separately made a significant change to how it approaches AI safety. Less than two years ago, the British government announced the foundation of the U.K. AI Safety Institute (AISI), which aimed to tackle security risks like the use of AI to make chemical or biological weapons, and the potential of humanity losing control of a superintelligent AI. The institute also had a partial focus on AI's societal risks, like spreading misinformation and perpetuating bias. On Thursday, the government recast the organization as the AI Security Institute. As its new name suggests, the reborn AISI still explores some of those security risks. However, it's no longer keeping an eye on societal risks, and it no longer appears to be focusing on potential for AI running amok. To hammer home the change, the new AISI will feature a 'criminal misuse team' working together with the Home Office, the U.K.'s security ministry. The British government also said it will work with Anthropic to explore using AI to transform the country's public services and drive scientific research. This is a first for the government, but it is not an exclusive deal; the government said it will try to strike similar partnerships with other leading AI companies. 'We look forward to exploring how Anthropic's AI assistant Claude could help U.K. government agencies enhance public services, with the goal of discovering new ways to make vital information and services more efficient and accessible to U.K. residents,' Anthropic CEO Dario Amodei said in a statement. No financial terms were mentioned. Anthropic's Economic Index, launched this week, will also come into play here. The index draws on anonymized conversations with Claude to infer how AI is being used across the economy, and the U.K. will use this information to 'adapt its workforce and innovation strategies for an AI-enabled future,' the government said. The AISI's revised mission appears to be part of the U.K.'s new strategy of falling into lockstep with President Donald Trump's in the U.S. Earlier this week, the U.K. caused some consternation in the AI community by refusing to sign the declaration emerging from the Paris AI Action Summit. The U.S. also declined to sign it. On the surface, the U.S.'s reasoning was down to a desire to avoid excessive regulation of AI—the declaration referred to international frameworks and governance—but many saw the document's references to inclusive AI and reducing digital divides as a guarantee that Trump's anti-DEI administration wouldn't sign them. The U.K.'s refusal was more of a surprise; its government cited concerns about 'global governance' and national security. A few weeks previously, one of Trump's first acts as returning president was to rescind President Joe Biden's 2023 executive order on providing guardrails for the technology, including in areas affecting civil liberties. U.S. Vice President JD Vance told the summit this week that he was not in Paris 'to talk about AI safety, which was the title of the conference a couple of years ago,' but rather to talk about 'AI opportunity.' His message was heavy on avoiding being risk-averse when it comes to AI. On Thursday, U.K. tech secretary Peter Kyle struck a very similar note. 'The changes I'm announcing today represent the logical next step in how we approach responsible AI development—helping us to unleash AI and grow the economy,' he said. 'The main job of any government is ensuring its citizens are safe and protected, and I'm confident the expertise our Institute will be able to bring to bear will ensure the U.K. is in a stronger position than ever to tackle the threat of those who would look to use this technology against us.' The government stressed in its statement that the AISI 'will not focus on bias or freedom of speech,' and AISI chair Ian Hogarth insisted that 'the Institute's focus from the start has been on security.' However, alongside that security focus, the AISI has also explicitly addressed societal issues like the potential for AI to manipulate public opinion, or to reinforce societal biases when used in transport or emergency services systems. These are things that former Prime Minister Rishi Sunak tasked it to do, and it even invited grant applications covering these very topics. At the time of publication, the government had not replied to a question about who might monitor AI bias issues now that the AISI would no longer do so. Fortune has also asked Hogarth why the AISI no longer focuses on societal risks and the potential for future AI getting out of control. This story was originally featured on
