CNBC’s Senior Economics Reporter Steve Liesman Reports Throughout CNBC’s Business Day Programming Friday, March 18th
ENGLEWOOD CLIFFS, N.J., March 18, 2011— Americans are deeply pessimistic about future economic growth amid fears that gas and food prices could remain elevated for years, according to the CNBC All-America Economic Survey.
The survey also finds the percentage of Americans who believe the economy will get worse in the next year spiking to 37%, a 15 point gain from December 2010. It’s now just five points below the all-time high in the survey of 43% in June 2008, which came in the midst of a surge in gasoline prices.
According to the survey, Americans see inflation as widespread and mostly permanent and are cutting back on non-essentials to make ends meet. On average, respondents see prices rising 6.6% over the next 12 months, up from 3% in December and the second highest median gain in the survey’s four-year history. Three-quarters of Americans say they have seen food prices rise over the past six months and 61% believe the increases will last longer than a year. A similar percentage believes that higher gas prices are here to stay.
When it comes to coping with these higher prices, more than 60% of Americans say they are either saving, traveling or driving less. More than 70% say they are spending fewer dollars on restaurants, movies and concerts, making it the top way the nation is economizing in the face of higher gas and food prices.
In one of the most dramatic responses to the survey, Americans also do not believe that their wages will keep up with these rising prices. Americans see their wages falling by 1.1% in the next 12 months, the biggest expected decline in the survey’s history. Less than a third of the nation expects wage gains in the next year, and most of these see only a modest 1% to 3% boost to their paychecks.
Americans expect their home values to fall along with their wages. After a brief blip upwards in December, expectations for housing price declines resumed in the latest survey, with Americans looking for a 1.2% mean decline, compared with a 0.3% rise expected in the December survey. It’s the biggest drop in the mean in the survey’s history.
The survey also found that attitudes towards owning a home have gotten more negative. Just 63% of Americans believe it is better to own than rent, which compares with 89% registered in a 1996 survey by Fannie Mae. And 48% of the nation know someone who has been foreclosed upon or is facing the threat of foreclosure, up from 33% in September 2008.
Still, 73% of Americans believe that owning a home is an essential part of the American dream, compared with 25% who say it is not.
The survey of 800 Americans from across the nation of all income groups, regions and ages was conducted from March 7th through March 10th, before the disaster in Japan. CNBC’s Senior Economics Reporter Steve Liesman will reveal the results throughout CNBC’s Business Day programming today, Friday, March 18th.
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