New Citi survey: Americans are mired in economic winter despite signs of spring.
By Jonathan Clements, Citi's Director of Financial Education April 12, 2010 01:07 PM
If things are so good, why do we feel so bad? A new nationwide survey released this week by Citi, and conducted by Hart Research Associates, found that 80 percent of Americans rate the economy as fair or poor and 59 percent believe the economy still hasn't hit bottom. Moreover, some 33 percent of Americans say they are worse off financially than they were a year ago and another 52 percent say their financial condition is about the same. We are, it seems, mired in an economic winter.
This may be a little puzzling, because there are plenty of signs of spring. U.S. economic growth turned positive in 2009's third quarter. March's unemployment rate was 9.7 percent, down from 10.1 percent in October 2009. The real estate market appears to be stabilizing. The Standard & Poor's 500-stock index is up some 75 percent since the March 2009 bear market low. What gives?
The grim mood speaks to the powerful and enduring impact of the recent financial crisis on the American psyche. It also, I suspect, reflects continuing job uncertainty. For many of us, our most valuable asset is our human capital, our ability to pull in a paycheck. As long as that asset seems threatened, we will likely take scant comfort from soaring share prices and stabilizing housing markets. This raises a critical question: Is the economic revival well in hand or could our grim mood possibly slow the recovery?
Indeed, in the months ahead, we're likely to hear a lot about the mood and the money habits of American families. Yes, more consumer spending would help the economy. But it's also important that Americans get their financial house in order, and paying down debt and saving more are critical to that effort.
Jonathan Clements is Director of Financial Education, Citi Personal Wealth Management.
NOTE: Survey Methodology Hart Research Associates conducted the telephone survey of 2,002 adults nationally from March 15-25, 2010. The Random Digit Dialed (RDD) survey has an overall statistical margin of sampling error of plus or minus 2.5 percentage points. The survey also included a panel of respondents who use only a mobile telephone.