Americans Sour on Economy, Distrustful of Washington
CNBC Senior Economics Reporter
Americans remain pessimistic about the economy and have little trust in Washington's economic leadership—despite $1.5 trillion in federal spending on stimulus and bailouts, a new CNBC "Wealth in America Report" finds.
There were a few glimmers of hope in the survey. Americans on average plan to spend more this holiday season and are slightly less negative about home prices, though the nation's overall economic mood remains foul.
Respondents to the survey expressed negative sentiments about the economy, stock market, housing values and wages. Many are also unhappy with the job elected officials, including President Barack Obama, are doing to get the economy back on track. (You can see full results by clicking on link at the end of this story).
Among the survey’s findings:
- Americans plan to increase their spending an average 10.5 percent this holiday compared to last year. But the gains are entirely driven by plans of the wealthy to spend more. Middle and low-income Americans plan to reduce their spending dramatically.
- More than half of Americans want money paid back from TARP to go towards deficit reduction rather than new government stimulus.
Most Americans disapprove of Washington’s economic leadership.
The approval rating for President Obama’s economic leadership was highest at just 46 percent, down from 56 percent in February.
That was followed by the Democratic Party at 39 percent, the Republican Party at 26 percent, Federal Reserve Chairman Ben Bernanke at 22 percent and Treasury Secretary Timothy Geithner at 18 percent.
Other findings include:
- Nearly one in four Americans disapproves of the way both political parties are handling the economy.
- More than half of Americans are pessimistic about the current state of the economy and the outlook for the future.
Asked about their confidence in American institutions and industries, just 24 percent expressed confidence in the Federal Reserve, 19 percent in the Treasury, 17 percent in healthcare companies and 10 percent in the financial industry.
By contrast, 77 percent of respondents said they are confident in the American military.
Americans predict their wages will decrease by 0.7 percent next year, the biggest drop since the survey began three years ago. At the same time, inflation expectations are up by 1.7 points to 3.9 percent.
Among the more optimistic findings:
- Americans believe their home prices will decline by only 0.3 percent in the next year, down from a 1.6 percent decline expected a year ago.
- The percentage of Americans rating the economy as poor has dropped to 60 percent from 70 percent.
- The percentage of Americans who say they will reduce their holiday spending has dropped to 48 percent from 55 percent a year ago.
When it comes to investing, 46 percent of the respondents said they have money in the stock market (including mutual funds, IRAs, and 401ks), while 42 percent said they have no money invested in stocks. 41 percent believe this is a good time to be investing in the stock market, but 48 percent feel this is a bad time to be buying stocks.
CNBC's "Wealth in America" survey of 808 adults was conducted by Hart/McInturff during the first three days of December. Click here to see the full results.
The margin of error is 3.5 percent. You can take our unscientific online poll here.
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