Americans Grow Gloomy About Future
(Bloomberg)—Americans have grown gloomier about both the economy and the nation's direction over the past three months even as the U.S. shows signs of moving from recession to recovery.
Almost half the people now feel less financially secure than when President Barack Obama took office in January, a Bloomberg National Poll shows.
Those concerns have put consumers in a miserly mood as they head to the mall for holiday shopping, with half the country planning to spend less on gifts than last year and few buyers willing to run up credit-card debt for Christmas.
"The recession may be over, but the administration seems to be losing the battle when it comes to winning the hearts and minds of Americans," says Chris Rupkey, chief financial economist for Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. "This is important because the spending of consumers is the main factor that will turn the economic recovery into a self- sustaining one."
Obama yesterday addressed anxiety over the economy with a speech proposing new spending on the nation's transportation system, tax credits to spur hiring by small businesses and incentives to make homes more energy efficient.
Unemployment in November stood at 10 percent, a drop from 10.2 percent in October yet still the second month in a row the figure stood in double digits.
No. 1 Concern The economy is the country's top concern, with persistently high unemployment the greatest threat the public sees. Eight of 10 Americans rate joblessness a high risk to the economy in the next two years, outranking the federal budget deficit, which is cited by 7 of 10. An increase in taxes is named as a high risk by almost 6 of 10.
Fewer than 1 in 3 Americans think the economy will improve in the next six months. They are pessimistic that the government will succeed in reducing unemployment or lowering the budget deficit.
A year into Obama's presidency, only 32 percent of poll respondents believe the country is headed in the right direction, down from 40 percent who said so in September.
The mood among members of Obama's own Democratic Party has shifted most dramatically: While Democrats remain the most positive, the proportion saying the country is on the right track dropped to 58 percent from 71 percent in September. Among independents, 26 percent say the country is on the right track, down from 29 percent in September.
The poll of 1,000 U.S. adults was conducted Dec. 3-7 by Selzer & Co., a Des Moines, Iowa-based firm. The margin of error is plus or minus 3.1 percentage points. The poll includes 714 likely voters in the 2010 general election, the margin of error for questions based on likely voters is plus or minus 3.7 percentage points.
Skeptical Over Stimulus The country has grown increasingly skeptical of the centerpiece of Obama's economic agenda, the $787 billion economic-stimulus package, with 60 percent of Americans saying it hasn't helped the economy, up from 49 percent who said that three months ago.
Michele Crawford, 37, a Las Vegas health-care worker who identified herself as a Democrat, says the stimulus plan put too much money in the hands of corporations rather than sending it directly to families through tax cuts.
"I think that was the wrong approach," Crawford says.
For now, former President George W. Bush continues to get most of the blame for the hard economic times. Six of 10 poll respondents say the economic difficulties Obama confronts were mostly inherited.
Blaming Bernanke, Geithner Still, there are signs the economic doldrums are tarnishing current officeholders.
Americans have turned against the administration's leading economic spokesman, Treasury Secretary Timothy Geithner, with 33 percent viewing him unfavorably against 26 percent with a favorable view. As recently as September, a slim plurality viewed Geithner favorably.
Federal Reserve Chairman Ben S. Bernanke, another public face of economic policy though he is independent of the White House, also declined in popularity. A third of the country views Bernanke favorably, down from 41 percent in September.
Bernanke's standing fell even though the Fed as an institution improved, with 50 percent holding a favorable opinion versus 44 percent three months ago.
Four out of 10 respondents have no opinion on either Geithner or Bernanke.
Some of the malaise may stem from middle-class households bracing for the expectation of greater burdens ahead, says J. Ann Selzer, president of Selzer & Co. Almost 9 in 10 poll respondents say they believe middle-class Americans will have to make sacrifices to decrease the deficit.
'We're Under Water' When asked about changes in measures of personal economic well-being—household income, job security, quality of health care, retirement savings and home equity—the responses changed little from September. Only 1 in 3 Americans indicated an improvement in any category.
For many consumers, that uneasiness means a shorter Christmas shopping list.
Cindy Gamet, 54, an environmental project manager who lives in Greeley, Colorado, says her family's prolonged encounter with financial insecurity is leading her to cut back further this holiday season.
"The economy has been on the decline for some time," Gamet says. "Our major investment, which was our home, it went south. So now we're under water."
'We're Spenders' Though it goes against her inclination—"we're spenders," Gamet says—she and her husband plan to limit gifts for their grandchildren and forgo presents to their adult children.
"We're going to do what we can for the kids, but the adults are just going to have to understand," Gamet says.
Just 8 percent of people plan to spend more on gifts this year than they did last year, while 47 percent say they will spend less.
The country is especially leery of taking on new debt for the holidays, with 82 percent of respondents saying they plan to pay for Christmas gifts solely from cash on hand or savings.
The Grinch may even have come to the Internet, where commerce has been shifting in recent years. Only a quarter of respondents—27 percent—say they will buy more gifts over the Web this year, while 42 percent say they will buy fewer and 22 percent say they will buy nothing at all.
To contact the reporters on this story: Mike Dorning in Washington at email@example.com; Rebecca Christie in Washington at firstname.lastname@example.org.