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Question: How can anybody read the following reports and honestly conclude that a
consumer recovery is on the horizon?
"U.S.
Economic Confidence Remains Lower"
(Gallup)
The majority of
Americans continue to say the economy is getting worse
Gallup's
Economic Confidence Index was -27 for the week ending Aug. 12, similar to the
-26 the week prior and little changed from the previous eight weeks, during
which it has hovered within a narrow range of -29 to -23.
"Poll:
Optimism On The Economy Drops" (TheDenverChannel.com)
Growing Number
Believe Conditions Getting Worse
A new national
survey indicates that the number of Americans who say things are going badly
in the country is on the rise, as a growing number of people believe that
economic conditions are getting worse.
The number of
Americans who said that things were going well had been slowly but steadily
rising since last fall, but numbers from a CNN/ORC International poll
released Friday reverse that trend, with optimism about how things are going
in the country now at 36 percent down seven points from April. And 63 percent
say things are going poorly, up six points from April.
"More
Than 50% of Poll Respondents Expect Economy to Get Worse" (Real
Time Economics)
Consumer
spending in the U.S. continued to decline during July as consumer sentiment
about the economy waned and expectations about personal finances were
unchanged, according to Discover Financial Services’ U.S. Spending
Monitor.
The poll index,
which tracks economic confidence and spending intentions of about 8,200
consumers a month, declined 1.4 points to 89.3 points last month.
The poll found
28% of respondents view the U.S. economy as improving, down from 29% in June
and 33% in May. Roughly 53% of respondents now rate the U.S. economy as poor,
unchanged from June.
However the
portion of consumers that expect the economy will get worse rose to more than
half for the first time this year–up 4 percentage points at
53%–as sentiment among men worsened. The portion of men who indicated
expectations the economy will worsen was up 9 percentage points at 57%, while
the amount of women who felt that way was unchanged at 50%.
"Middle-Class
Economic Security Declines as Wealth Concentration Increases"
(Center for American Progress)
America’s
middle class became poorer and more economically insecure during the Great
Recession, as household wealth concentrated in the hands of the rich,
according to new Federal Reserve data about the recession and its aftermath.
The latest Survey of Consumer Finance data covering the years 2007 to 2010
are yet another reminder that addressing the economic insecurity of the
nation’s middle class must be the top priority for policymakers.
...
The percentage
of families with no or negative wealth rose to 32.5 percent in 2010—up
from 19.2 percent in 2007. Likewise, the share of these households without
sufficient emergency funds dropped to 32.4 percent in 2010, down from 37.5
percent in 2007. On both measures, household financial insecurity was the
highest in 2010—higher than any other period since 1989, the first year
for which consistent data exist.
"High
Anxiety: Half of Baby Boomers Doubt They Will Ever Retire" (Los
Angeles Times)
Baby boomers
are in a state of stress, with half unsure of their retirement prospects and
the vast majority blaming political gridlock for damaging their economic
security, according to interest group AARP.
Nearly half of
voters ages 50 to 64 who have yet to retire say they’re dissatisfied
with their financial situation, AARP found in a recent survey. A majority
believe the economic downturn will shrink their retirement savings, forcing
them to rely more on Social Security and Medicare.
Nearly three
quarters believe they’ll have to delay retirement and continue working,
while nearly as many don’t think they’ll live comfortably once
they reach it.
Half
don’t think retirement will ever come, compared to 43% of younger
voters.
Since 2005, the
median wealth of a boomer household has sunk more than 17% to $149,348,
according to recent Census Bureau figures. Many no longer plan to leave their
children an inheritance.
Worries about
health care, inflation, taxes, nest eggs and more have boomers scoring a 70%
on AARP’s anxiety index, compared to 59% of younger voters and 46% of
people ages 65 or older.
Even the news
that is being spun as positive is anything but encouraging. Take this story,
for example:
"Workers
Living Paycheck to Paycheck Drops To 40 Percent: Poll" (Newsroom
America)
Fewer American
workers are reliant on their next payday to make ends meet, according to a
new CareerBuilder survey, with forty percent of workers reporting that they
always or usually live paycheck to paycheck.
That's a slight
decrease from 42 percent in 2011 and this year's figure marks a recession-era
low, continuing a downward trend from a peak of 46 percent in 2008, during
the early days of the financial crisis.
The nationwide
survey – conducted between May 14 and June 4, 2012 among more than
3,800 full-time workers – found that a majority of those currently
living paycheck to paycheck (53 percent) were not doing so until 2008.
Additionally,
37 percent of workers say they sometimes live paycheck to paycheck, while 23
percent say they never do. Twenty percent of workers were unable to make ends
meet at least once in the past year.
Workers making
at least six figures are feeling more confident in 2012. Twelve percent of
workers who earn $100,000 or more always or usually live paycheck to paycheck
– trending down from 14 percent in 2011 and 17 percent in 2010.
"Making
ends meet remains a challenge for millions of households, but the situation
has improved for workers who've grown more confident with their job security
or who've taken steps to pay down debt and save more," said Rosemary Haefner, vice president of human resources at
CareerBuilder.
Sure, the
headline number showed a marginal improvement from a year ago, but the way I
read it, nearly
four-fifths of American workers say they live paycheck-to-paycheck at least
some of the time. That sounds more like a recipe for disaster
than a reason for optimism.
Sometimes I
feel like I'm on another planet.
Michael J. Panzner
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