ENGLEWOOD CLIFFS, N.J., JUNE 29, 2011—The CNBC All-America Economic Survey of 800 Americans throughout the country finds attitudes towards the economy are about as bleak as they were during the recession, which technically ended two years ago. But there’s a new twist: now the wealthiest Americans have abandoned their optimism.
Nearly two-thirds of the nation (63%) is pessimistic about the current state of the economy and its future, with just 6% optimistic about both. The attitudes of wealthier Americans—those with incomes greater than $75,000 or more than $50,000 invested in the stock market—are now in line or even more downbeat than the nation as a whole.
In fact, just 26% of Americans with incomes above $75,000 believe the economy will get better in the next year, four points below the national average. In December, it was five points above. For the first time in the survey’s five-year history, less than half of those with $50,000 or more in stocks think it’s even a good time to invest in the market.
The only bright spot in the survey: the percentage of Americans who believe the economy will get worse dropped to 30% from 37% in March. As a result, 36% believe the economy will stay the same over the next year, a six-point gain from March.
Among the survey’s other findings:
Americans are more pessimistic about the outlook for their home values than at any time since the survey began. Just 15% of respondents believe their home values will increase in the next year, down from 18% in March. Average Americans believe their home price will fall by 1.6% over the next year, tied for the survey’s worst reading ever.
Americans expect their wages to drop 0.7% in the next year, equal to the second-worst survey reading.
Democrats are more optimistic than Republicans, but, in a troubling sign for the Obama administration, the economic views of Independents hue much more closely to the downbeat attitudes of Republicans.
60% of the public is reacting to higher food and gas prices by scaling back on summer vacation plans, 63% are saving less, 64% are driving less and 70% say they are spending less on out-of-home entertainment like movies, restaurants and concerts.
22% of the public says they are using their credit cards more to make ends meet, up from 16% in March. Inside the number, 20% of the wealthiest Americans say they’re using more plastic because of higher prices, compared to just 12% in March.
The survey also finds that about half of the American public sides with the Republican stance in debt ceiling talks. The survey finds that 49% of the public believes it is worse for the nation to raise the debt limit without cutting spending. Only 25% say it's worse for the nation to not pay the country's financial obligations such as Social Security or Medicare. One in five Americans says they don't know enough to answer the question. The views of Independents are far closer to those of Republicans than Democrats on the issue.
When it comes to the deficit, about 40% of the public says the wars in Afghanistan and Iraq contributed most to the deficit, followed by the 26% of respondents who blame the economic stimulus plan and spending by the Obama administration. About equal numbers (14% and 13%, respectively) say the biggest contributors to the deficit are the Bush tax cuts and the recession.
Two-thirds of the public believes it is unlikely that Democrats and Republicans can come together and agree to a deal to reduce spending in the next several months. But 60% of the public said both parties would be to blame for the failure to cut spending. Not surprisingly, Democrats blame Republicans and Republicans blame Democrats, but Independents blame both parties.
Married men and people living in the South are among the most pessimistic in the nation. And Republicans are newly twice as downbeat on the economy as Democrats. Independents are about as pessimistic as Republicans.
CNBC’s Senior Economics Reporter Steve Liesman will break down the survey results today during CNBC’s Business Day programming beginning on “Squawk Box” (6AM-9AM ET).
The CNBC All-America Economic Survey is a quarterly national poll of 800 Americans throughout the country, among the most in-depth looks at the nation's views on the economy. It was conducted June 16-18 by Hart-McInturff, which also conducts the NBC-WSJ. The survey was launched in 2007.
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