Americans Paying More for Gas, Utilities, Food, and Healthcare

GALLUP NEWS SERVICE

PRINCETON, NJ -- How is the average American doing financially these days? In an attempt to answer that question, a recent Gallup Panel survey asked respondents whether a variety of financial aspects of their lives had gone up, gone down, or stayed the same over the past year.

The results can be divided into three categories: the bad news, the mixed news, and the good news. For ease of interpretation, the accompanying table is recalculated based on those who had opinions on each element of their financial lives. The original results from the survey are presented after the Survey Methods paragraphs.

First, the bad news:

1. A majority of Americans believe that the amount they pay for gasoline, home utilities, food and groceries, local property taxes, out-of-pocket healthcare costs and drugs, and health insurance coverage has gone up over the past year.

2. A majority of those who have opinions about their take-home pay say it has stayed the same or has gone down over the past year.

3. Only a small percentage of Americans say they have been able to increase the monthly amount they put away in savings over the last year.

The mixed news:

Half of Americans say their state taxes have gone up. The rest say they have stayed the same or gone down.

The good news:

1. The majority of Americans believe their federal taxes have stayed the same or gone down over the past year.

2. The significant majority of homeowners believe the value of their homes has gone up.

3. The majority of renters believe their rent has stayed the same or gone down over the past year.

Thinking back over the past year, would you say that each of the following has gone up, remained about the same, (or) gone down?

These data in general present a fairly gloomy picture. Although the data themselves do not indicate the magnitude of the financial hit taken because of these changes over the past year, the average American clearly perceives that he or she is spending more on a variety of basic costs. At the same time, the majority of Americans say their take-home pay is the same as or actually less than it was a year ago.

As a result of all of this, only a small percentage of Americans say they were able to put away more in savings in the last year, while almost half say they are actually putting away less.

The redeeming element in this is the cost of housing. Renters on average report that their rent is the same as or less than it was a year ago, and the overwhelming majority of homeowners indicate an increase in the value of their homes over the year.

Top-of-Mind Responses

A different perspective is seen by looking at Americans' responses to a question about the most important financial problem facing their families.

What is the most important financial problem facing your family today? [OPEN-ENDED]

These top-of-mind responses to a degree underscore the results of the closed-ended question. Americans this month are most worried about healthcare costs, then the price of energy, then a series of basic cash flow issues -- lack of money/low wages, inflation, and too much debt.

Although a majority of Americans have positive perceptions about their housing value or costs, and no more than half say either their state or federal taxes have gone up, small percentages still report these as the most important financial problems facing their families today: 6% mention the cost of owning or renting a home, and 5% mention taxes. (A lucky 20% of Americans say they don't have a financial problem, or can't think of one in answer to this question.)

Implications

Many observers have asked why consumer confidence in the U.S. economy remains low, even when a number of government statistics and so-called hard data show that the economy may be improving. Gallup's data on Americans' views of their personal financial situations provide an important part of the answer. The average American clearly perceives that he or she is paying more for many basic costs, while the majority reports no increase in take-home pay. Although broad questions about the health of the U.S. economy don't have to be answered in terms of one's own situation, it is almost inevitable that they will be. Thus, it is unlikely that American consumers will see the light at the end of the economic tunnel until they perceive progress in the balance between their day-to-day income and their expenses.

Survey Methods

The results for the June poll are based on telephone interviews with a randomly selected national sample of 1,002 adults, aged 18 and older, conducted June 1-4, 2006. For results based on this sample, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3 percentage points.

Results for the May panel study are based on telephone interviews with 1,003 national adults, aged 18 and older, conducted May 22-24, 2006. Respondents were randomly drawn from Gallup's household panel, which was originally recruited through random selection methods. The panel was weighted prior to sampling so that it was demographically representative of the U.S. adult population. For results based on the total sample of national adults, one can say with 95% confidence that the margin of sampling error is ±3 percentage points.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

Thinking back over the past year, would you say that each of the following has -- [ROTATED: gone up a lot, gone up a little, remained about the same, gone down a little, (or) gone down a lot]? How about -- [RANDOM ORDER]?

Full Results:

A. Your take-home pay after taxes and deductions

B. The price you pay for a gallon of gasoline

C. The amount of money you pay out-of-pocket for healthcare and prescription drugs

D. The amount you pay for health insurance coverage

E. The value of your home

BASED ON 838 ADULTS WHO OWN THEIR HOMES

F. Your rent

BASED ON 838 ADULTS WHO RENT THEIR HOMES

G. The price you pay for food and other groceries

H. Your federal income taxes

I. Your state taxes

J. Your local property taxes

K. The amount of money you are able to put away in savings each month

L. The amount you pay for home utilities such as heating, electricity, and water