Bleak View of Economy Spreads to Wealthy Americans: CNBC Survey
In this economy, even money isn’t enough to buy happiness, a new CNBC national survey finds.
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 percent) is pessimistic about the current state of the economy and its future, with just 6 percent 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 percent 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 the stocks investors 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 percent from 37 percent in March. As a result, 36 percent believe the economy will stay the same over the next year, a six point gain from March. Given the current state of the economy, that’s not exactly a hopeful sign.
Among the survey’s other findings:
—Americans are more pessimistic about the outlook for their home valuesthan at any time since the survey began. Just 15 percent of respondents believe their home values will increase in the next year, down from 18 percent in March. Average Americans believe their home price will fall by 1.6 percent over the next year, tied for the survey’s worst reading ever.
—Americans expect their wages to drop 0.7 percent 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 percent of the public is reacting to higher food and gas pricesby scaling back on summer vacation plans, 63 percent are saving less, 64 percent are driving less and 70 percent say they are spending less on out-of-home entertainment like movies, restaurants and concerts.
—22 percent of the public says they are using their credit cards more to make ends meet, up from 16 percent in March. Inside the number, 20 percent of the wealthiest Americans say they’re using more plastic because of higher prices, compared to just 12 percent in March.
In another blow to Democrats and the Obama administration, the survey finds that about half of the American public sides with the Republican stance in debt ceiling talks. The survey finds that 49 percent of the public believes it is worse for the nation to raise the debt limit and go further into debt, that is, to not cut spending, than for the government to default on Social Security payments and other government obligations. Only 25 percent say it's worse for the nation to not pay its bills. 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, the only good news for President Obama is that the public doesn't finger him and his policies as the biggest contributor. He’s the second biggest. About 40 percent of the public say the wars in Afghanistan and Iraq contributed most to the deficit, followed by the 26 percent of respondents who blame the economic stimulus plan and spending by the Obama administration. About equal numbers (14 percent and 13 percent, 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 percent of the public say 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.
About the Survey: 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.