As markets fluctuate and concerns about hitting the federal debt ceiling build, Americans may  feel more anxious about the health of their investments.

The investment index dropped 2.6 points this week to 50.5 (out of 100) in the Low Cost Advisor-Ipsos Consumer Confidence Weekly Tracker. The index measures purchasing and investment confidence, personal financial situation and outlook.

The survey, conducted by Ipsos, measures consumer sentiment over time.

A historical look at the investment index shows some overlap between consumer confidence fluctuations and events that affected investing. For example, investment index declines in March and July 2021 coincided with temporary dips in both the New York Stock Exchange and the NASDAQ. The former aligned with uncertainty surrounding the delivery of Covid aid in the third stimulus package, while the latter coincided with spiking rates of coronavirus cases and fears of the Delta variant.

While we don’t know what exactly is going through the minds of people across the country at any given moment, Americans face many financial anxieties simultaneously.

“With a looming government shutdown, rising prices, and ongoing uncertainty about new coronavirus variants, there are signs of hesitation under the surface,” says Mallory Newall, vice president at Ipsos Public Affairs.

From Washington to Consumers’ Wallets

The struggle in Washington, if unchecked, could have a “cataclysmic” economic impact. And although a shutdown was temporarily staved off in the final hours before yesterday’s deadline, the debt ceiling issue remains unresolved—and the risk of the federal government defaulting on its debts has increased. Treasury Secretary Janet Yellen warned lawmakers that the Treasury will run out of money to pay its financial obligations in mid-October if they don’t vote to raise the debt ceiling.

Even just the threat of a default on the nation’s financial obligations can wreak havoc on the economy. Borrowing can become more expensive for consumers, and job losses could wipe out much of the growth witnessed since the U.S. started rehiring after Covid lockdowns last year.

And though it’s uncertain whether the average American is at home fretting about the impact of a default threat on their personal finances, they are showing some concern about their purchasing ability. This week, 44% of respondents said they felt more comfortable making a major purchase, like a home or car, than they were six months ago—a drop of 4 points from last week. Additionally, 51% reported feeling more comfortable making other household purchases, a decrease of one point from the week prior.

Retailers are already making plans to promote early holiday sales in response to continuing concerns about inflation and supply chain bottlenecks.

Survey methodology: Ipsos, which surveyed 932 respondents online on Sept. 28 and 29, 2021, provided the results exclusively to Low Cost Advisor. The survey is conducted weekly to track consumer sentiment over time, using a series of 11 questions to determine whether consumers feel positively or negatively about the current state of the economy and where it looks to be going in the future.