AMERICANS PAINT GRIM OUTLOOK FOR THE ECONOMY, BUT REMAIN OPTIMISTIC ABOUT FUTURE DUE TO ELECTION OF SEN. OBAMA, ACCORDING TO A NEW CNBC/PORTFOLIO.COM WEALTH IN AMERICA REPORT
ENGLEWOOD CLIFFS, N.J., Dec. 10, 2008---On the eve of the holiday season, a vast majority of Americans are painting a deeply grim picture of the current state of the economy with bleak implications for Christmas spending, according to the findings of the new CNBC/Portfolio.com Wealth in America report released today.
In a somewhat disturbing and surprising finding, a third of Americans surveyed said they aren't confident or are only somewhat confident that money saved in a federally insured bank account will be safe if that bank were to fail.
However, Americans are expressing optimism about the future that appears to be tied to the election of Sen. Barack Obama, according to the CNBC/Portfolio.com Wealth in America report. The survey of 800 Americans was conducted from December 1 through December 3.
The current pessimism runs so deep that, for the first time in the survey's two-year history, no statistically significant group-not even 1%--rated the economy as "excellent." The percentage of Americans who rate the economy as "poor" rose to 70% from 65% last quarter and 33% a year ago.
The negativity reflected in the survey possibly foreshadows economic consequences: Americans surveyed said they plan to spend on average just $704 on their holiday shopping, down 4.6% compared with a year ago. One in ten Americans plan to spend nothing on holiday shopping, double the one in twenty from a year ago.
Twenty-seven percent of Americans believe the economy will get worse, about the same as last quarter (26%). Yet there is optimism; 69% believe the economy will get better or stay the same, compared with 63% last quarter.
The optimism appears connected with a change in administrations. Democrats are twice as optimistic about the economy as they were in September; Republicans are nearly twice as pessimistic. But independents are more upbeat, with 35% now saying the economy will improve in 12 months, compared with 25% in September. Asked how the election of Sen. Obama will influence the economy, 55% expect it to get better and only 13% see it worsening. The answer breaks sharply along party lines: with 78% of Democrats but only 24% of Republicans believing Obama's election will improve the economy. Independents split down the middle.
The CNBC/Portfolio.com Wealth in America report contained further sobering news for the beleaguered automobile industry. More than half of those surveyed said they wouldn't buy or lease an automobile if the manufacturer were under bankruptcy protection.
The survey revealed 52% of Americans are unwilling to buy a car from a manufacturer that is under bankruptcy protection. Thirty-seven percent said they're willing to purchase an auto from a manufacturer under bankruptcy protection and 11% said they weren't sure. The results appear to back up the claims of automakers that filing bankruptcy would severely cripple their businesses.
Regardless of what Americans believe about the future of the economy, they are not optimistic about a series of key economic variables. Americans think their wages will grow by only 3.1% next year, down from 5.3% a year ago; they believe their home prices will decline by 1.6%, the most in the life of the survey, and considerably below the 0.3% decline envisioned in September. A year ago, Americans thought their home prices would rise by 2.2% over the coming 12 months.
The results of the poll will be reported throughout the day, Wednesday, December 10 on CNBC by CNBC Senior Economics Reporter Steve Liesman. Joining the discussion will be John Harwood, CNBC's Chief Washington Correspondent and Margaret Brennan, CNBC Retail Reporter. Video as well as articles can be seen on CNBC.com and Portfolio.com.
The full results of the latest CNBC/Portfolio.com 'Wealth in America' survey will be released on Wednesday, December 10, beginning on CNBC's "Squawk Box" (6-9 AM ET).
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