Published: Wednesday, 28 Dec 2012
By: Steve Liesman, Senior Economics Reporter
The American public’s attitude toward the economy is broadly on the upswing, according to the latest CNBC All-America Economic Survey, but details show deep-seated concerns that present problems for both political parties in the presidential election.
The poll of 836 Americans across the country found that 36 percent believe the economy will improve over the next year, a nearly 10-point gain from November, and the highest level of optimism since 2010.
Americans expect the biggest gains in their paychecks in nearly four years. They are also more upbeat about their homes: 22 percent expect their home’s value to increase in the next year, up from 15 percent last quarter and the highest level since December 2010.
In other findings of the survey:
• More than 51 percent of the public own an Apple product, with one in three owning more than one. The median American household has 1.6 Appleproducts.
• Gold is seen by the American public as the best investment right now, chosen by 37 percent of respondents. Real estate is a distant second with 24 percent followed by stocks at 19 percent.
• 65 percent of the public think it is better to own a home, than to rent. That’s a sharp drop from 1996 when, asked by Fannie Mae, 90 percent of the public thought it was better to own.
• 73 percent of Americans still believe owning a home is an essential part of the American dream, unchanged from the survey’s findings a year ago.
• More than half of Americans say the government should not intervene in the housing market to raise home values.
• President Obama gets a bit more of the blame for the recession than he did in October 2010, with 17 percent of the public saying he’s mostly responsible, up from 13 percent. Both the President and congressional Republicans took more of the blame for the rise in the budget deficit than when CNBC last asked the question in October 2010.
• In a warning signs for the President, Independents are more likely to blame the President for economic problems such as unemployment and the recession than they were in 2010.
• Americans on average believe the government should not bail out the housing market; the Bush tax cut should not be extended and that millionaires should pay a 31 percent tax rate.
Despite improvement in key measures in the All-America Economic Survey, most remain far below their pre-recession levels.
For example, while 22 percent believe their home values will increase now, the figure was above 50 percent in March 2007. While Americans believe their wages on average will rise by 2.3 percent in the next year, that figure was 7.3 percent five years ago.
Significantly for President Obama, only 28 percent of the public say they are better off now than they were four years ago, the lowest percentage recorded in a presidential election year going back to 1992.
In no demographic group — including Democrats, the wealthy or those expecting higher wages — do more than half of respondents say they are better off now. When President George H.W. Bush lost reelection in 1992, 37 percent of the public said they were better off under his presidency.
At least part of the underlying national economic malaise seems clearly to be tied to higher gasoline prices. The survey shows that 28 percent of Americans say high gasoline prices is their biggest worry, ranking it equal with concern over health care costs. The cost of retirement was a distant third at 14 percent.
A third of the public believes that gasoline prices will remain elevatedfor longer than four years and expectations for price increases of everyday goods are at their highest level in a year, an inflationary concern that echoes survey from last year during a similar gasoline price spike.
Overall, the survey presents a picture of an economy that is clawing its way back from the depths of the recession but is far from out of the hole. For every positive statistic there is at least one counterpoint. For example, 29 percent of the public say their home is worth less than what they paid for it, up from 26 percent a year ago.
The improvement does not appear to be broad-based. For example, when it comes to wage gains, those earning $75,000 or more expect their paychecks to rise by 4.1 percent in the next year. Those earning less than $75,000 expect an increase of just 1.1 percent.
In another example, 41 percent of Americans earning more than $100,000 annually expect the economy to improve, but just 32 percent of those earning less than $30,000 share that optimism. Still, during the economy’s worst days, there was not even much optimism among the wealthy.
As the All-America Economic Survey has uniquely shown over the past several years, housing remains the key to the economic outlook. No group in the survey is more optimistic than the cross-section of Americans who believe their home prices will go up; no group is more pessimistic on the economy than those predicting their home prices will fall.
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