Gallup Consumer Indicator Turns Negative for First Time Since 1993

by Lydia Saad

Declining confidence may reflect partisan politics as well as economic concerns

GALLUP NEWS SERVICE

PRINCETON, NJ -- Gallup Poll consumer trends show that Americans' pessimism about their finances has inched up steadily since January and is now at the highest level recorded by Gallup since the question was first asked in 1976. Gallup's Aug. 16-19 national telephone survey finds that 41% of Americans say their personal financial situation is worse today than it was a year ago, while just 37% say it is better. This represents the first time since 1993 that more Americans feel financially worse off rather than better off.

Part of the reason for this negativity could simply be the stock market. A recent Gallup poll found that close to a third of Americans (29%) say they lost money in the stock market over the past year. This contrasts with less than 1% of Americans who in 1997 reported personal stock losses. Part of the reason could also be politics. Consumer sentiment about their finances has declined most sharply this year among Democrats, with a dramatic drop evident between January and February, shortly after Republican President George W. Bush was inaugurated.

Whatever the reason for the sharp drop in consumer confidence earlier this year, Americans have become even more discouraged about their finances in subsequent months. In January 2001, 49% of the nation's adults considered themselves financially better off than a year ago and only 30% felt worse off, for a net positive rating of 19 points. That figure dropped to 16 points in February, six points in April, and three points in July, before turning negative by four points in August. According to Gallup's trend on this question dating back to 1976, the highest level of positive consumer sentiment about personal finances occurred in January 1999, when 58% of Americans felt better off and only 21% felt worse off, for a net positive rating of 37 points.

Personal Financial Situation
Compared to a Year Ago

There is a noteworthy silver lining in the poll, however. Unlike 1992, when Americans' negativity about their current financial situation was paired with pessimism about their finances in the future, Americans are remarkably optimistic today that their finances a year from now will be on the upswing. In fact optimism about ones' future finances is almost as high today as it was in the economic boom times of 1999.

Personal Finances:
Current Conditions Vs. Outlook for Next Year

A Democratic Funk?

Although consumer confidence ratings are often interpreted as a reflection of the nation's economy, Gallup data suggests there may be a substantial political element to Americans' views about the economy and their personal finances. As Gallup has observed with respect to other measures of the public's mood -- such as satisfaction with the nation as a whole -- Americans who share the party identification of the sitting president tend to have a rosier view of things than do those who are supporters of the opposing political party. Whether that phenomenon reflects real attitudes about the country or a political unwillingness to give the opposition party's president credit for political or economic wellbeing is not clear. In either case, optimism about personal finances has declined among Republicans as well as Democrats since October 2000, but it has declined most precipitously among Democrats.

Since October 2000 -- a month before the presidential election, and a fairly robust time economically -- net optimism about personal finances (the percent optimistic minus the percent pessimistic) among Republicans has fallen eight points, compared to a 33-point drop among independents and a 65-point drop among Democrats. More than half of this enormous drop in confidence among Democrats (at least 39 points) occurred this year, after the 2000 election had already been decided in George W. Bush's favor.

Perhaps compounding Democratic inclinations to withhold positive economic evaluations -- and confounding Republican inclinations to dispense them -- are ongoing rate reductions by the Federal Reserve to prop up the sagging economy, slow GDP growth, and increased media references to economic "recession." Economist Michael Burt of Economy.com points out that some of these factors may have been especially prominent in consumers' minds at the start of the year.

Net Optimism About Personal Finances

 

Republican
%

Independent
%

Democrat
%

2000 Oct 6-9

19

36

43

2001 Jan 10-14

14

17

28

2001 Feb 1-4

24

7

17

2001 Apr 6-8

18

6

-2

2001 Jun 11-17

21

2

-9

2001 Jul 19-22

22

-4

-6

2001 Aug 16-19

11

3

-22

Change since Oct 2000

-8

-33

-65

A similar political pattern is seen in Americans' evaluation of the overall economy. Gallup asks,How would you rate economic conditions in this country today -- as excellent, good, only fair, or poor?The overall rating of excellent/good has fallen from 71% in October 2000 to 36% today -- a drop of 35 points. During this period, positive economic sentiment among Republicans has fallen just 22 points (from 70% to 48%), while among Democrats it has fallen 49 points (from 77% to 28%). Most of the decline in these numbers has come in 2001, again, since Bush took office.

"Excellent/Good" Rating of U.S. Economy

 

Republican
%

Independent
%

Democrat
%

2000 Oct 6-9

70

65

77

2000 Nov 13-15

73

69

74

2000 Dec 2-4

64

61

65

2001 Jan 10-14

68

60

69

2001 Feb 1-4

64

41

49

2001 Mar 5-7

52

41

44

2001 Apr 6-8

57

44

34

2001 May 10-14

52

37

31

2001 Jun 11-17

53

38

36

2001 Jul 19-22

55

37

32

2001 Aug 16-19

48

35

28

Change since Oct 2000

-22

-30

-49

Other Indicators Provide Mixed Economic Picture

Despite the federal tax "advance payment check" hitting Americans' mailboxes this summer, Gallup also finds a decline in the percentage of Americans who say they are putting money aside in savings this year. Less than half of Americans, 47%, told Gallup in the recent financial survey that they are managing to save either a little or a lot of money. This compares to 59% last September and 58% in 1998. A third of Americans, 35%, say they are "just managing to make ends meet," while 16% are either "drawing on savings" or "running into debt." Last year, just 7% reported spending more than their income level.

Overall, only 52% of Americans characterize their financial situation today as excellent or good, while nearly as many, 47%, say it is only fair or poor.

While Americans' personal financial evaluation is at a record low, their "current conditions" evaluation of the nation's economy is still well above where it was in 1992 and 1993, when only 10-21% of Americans rated the economy as excellent or good. However, this evaluation has declined sharply this year, and took another tumble, from 41% in July to 36% in August. That figure is down from 67% in January.

Excellent/Good Economic Rating

Confidence in Job Security Seems Unshaken

Despite consumers' dwindling confidence in their own personal finances and continued news of worker layoffs, the new poll finds working Americans' satisfaction with their job and income security to be holding steady. More than half of all full- and part-time employees (54%) tell Gallup that they are "completely satisfied" with their job security today. This compares favorably with the 48% satisfaction recorded by Gallup two years ago and is up sharply from the 35% who felt this confident during the 1991 recession. While the overall level of worker satisfaction with the amount of money they earn is fairly low, it is also unchanged from last year, holding at 24% today who feel completely satisfied, compared to 23% last year. This too is up from 1991 when only 13% were satisfied with their income.

Survey Methods

The results below are based on telephone interviews with a randomly selected national sample of 1,013 national adults 18 years and older, conducted Aug. 16-19, 2001. For results based on this sample, one can say with 95 percent confidence that the maximum error attributable to sampling and other random effects is plus or minus 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.

Next, we are interested in how people's financial situation may have changed. Would you say that you are financially better off now than you were a year ago or are you financially worse off now?

 

 

Bet-
ter off

Worse off

SAME (vol.)

No
opin-
ion

   

Bet-
ter off

Worse off

SAME (vol.)

No
opin-
ion

 

%

%

%

%

   

%

%

%

%

2001 Aug 16-19

37

41

21

1

 

1991 May

32

33

32

3

           

1991 Apr

29

37

33

1

2001 Jul 19-22

39

36

25

*

 

1991 Mar 21-24

31

32

37

1

2001 Jun 11-17

42

37

20

1

 

1991 Mar 28-31

37

34

28

1

2001 Apr 6-8

42

36

22

*

 

1991 Feb

37

35

28

*

2001 Feb 1-4

46

30

23

1

 

1991 Jan 11-13

27

39

33

1

2001 Jan 10-14

49

30

21

*

 

1991 Jan 3-6

35

32

32

1

2000 Oct 6-9

55

22

22

1

 

1990 Dec

38

26

36

*

2000 May 18-21

53

26

20

1

 

1990 Oct 25-28

38

26

35

1

1999 Oct 21-24

56

19

24

1

 

1990 Oct 18-21

27

30

41

2

1999 Aug 24-26

53

22

25

*

 

1990 Oct 11-14

32

26

41

*

1999 Jun 4-5

57

20

22

1

 

1990 Sep

40

32

27

1

1999 Jan 15-17

58

21

21

*

 

1990 Aug

43

29

27

1

1998 Oct 29-Nov 1

53

24

22

1

 

1990 Jul

44

27

28

1

1998 Mar 20-22

55

24

20

1

 

1990 Feb

49

26

24

1

1997 Jun 26-29

44

29

26

1

 

1990 Jun

42

31

25

2

1997 May 6-7

45

25

28

2

 

1988 May

47

28

24

1

1996 Mar 8-10

49

21

29

1

 

1987 Jun

43

24

32

1

1994 Dec 16-18

40

29

31

*

 

1986 Jun

46

24

30

*

1994 May 20-22

40

33

26

1

 

1985 Jun

43

26

29

2

1994 Mar 7-8

34

31

34

1

 

1984 Jul

40

34

25

1

1993 Dec 4-6

36

31

33

*

 

1983 Jun

28

32

39

1

1993 Jun

29

34

36

1

 

1982 Aug

25

26

46

3

1992 Feb

34

19

46

1

 

1981 Jun

33

30

35

2

1992 Jan

30

26

43

1

 

1980 Mar

30

24

45

1

1991 Dec

33

26

40

1

 

1979 Jun

30

27

41

2

1991 Oct

35

22

42

1

 

1978 Jun

35

31

32

2

1991 Sep

34

37

28

1

 

1977 Jun

39

28

31

2

1991 Jul

34

33

32

1

 

1976 Sep

33

36

30

1

                     

*Less than 0.5%

                   

(vol.)=Volunteered response

         


Looking ahead, do you expect that at this time next year you will be financially better off than now or worse off than now?

 

 

Bet-
ter off

Worse off

SAME (vol.)

No
opin-
ion

   

Bet-
ter off

Worse off

SAME (vol.)

No
opin-
ion

 

%

%

%

%

   

%

%

%

%

2001 Aug 16-19

66

18

13

3

 

1991 May

57

19

16

8

           

1991 Apr

56

18

17

9

2001 Jul 19-22

64

18

13

5

 

1991 Mar 21-24

56

20

18

6

2001 Jun 11-17

62

22

11

5

 

1991 Feb 28-Mar 1

64

20

9

7

2001 Apr 6-8

62

18

15

5

 

1991 Feb

57

20

15

8

2001 Feb 1-4

61

19

16

4

 

1991 Jan 11-13

41

21

25

13

2001 Jan 10-14

63

21

13

3

 

1991 Jan 3-6

52

20

18

10

2000 Oct 6-9

68

11

15

6

 

1990 Dec

58

17

18

7

2000 May 18-21

67

13

14

6

 

1990 Oct 25-28

50

15

27

8

1999 Oct 21-24

68

13

12

7

 

1990 Oct 18-21

41

16

34

9

1999 Aug 24-26

67

16

13

4

 

1990 Oct 11-14

48

13

30

9

1999 Jun 4-5

67

12

17

4

 

1990 Sep

51

20

17

12

1999 Jan 15-17

68

14

14

4

 

1990 Aug

57

20

16

7

1998 Oct 29-Nov 1

66

12

16

6

 

1990 Jul

58

18

17

7

1998 Mar 20-22

71

14

9

6

 

1990 Feb

65

16

13

6

1997 Jun 26-29

59

17

20

4

 

1989 Jun

58

20

13

9

1997 May 6-7

60

17

20

3

 

1988 May

63

17

9

11

1996 Mar 8-10

66

16

11

7

 

1987 Jun

57

18

17

8

1994 Dec 16-18

63

17

17

3

 

1986 Jun

57

17

20

6

1994 May 20-22

59

21

16

4

 

1985 Jun

52

19

19

10

1994 Mar 7-8

53

22

19

6

 

1984 Jul

52

28

12

8

1993 Dec 4-6

56

18

22

4

 

1983 Jun

43

28

19

10

1993 Jun

49

32

14

5

 

1982 Aug

37

24

29

10

1992 Feb

54

14

28

4

 

1981 Jun

41

25

26

8

1992 Jan

51

15

28

6

 

1980 Mar

36

24

31

9

1991 Dec

54

17

21

8

 

1979 Jun

33

27

30

10

1991 Oct

55

16

23

6

 

1978 Jun

38

30

20

12

1991 Sep

53

22

19

6

 

1977 Jun

47

27

17

9

1991 Jul

57

19

15

9

           
                     

*Less than 0.5%

                   

(vol.)=Volunteered response

         


How would you rate your financial situation today – as excellent, good, only fair, or poor?

 

 

 

Excellent

Good

Only fair

Poor

No opinion

           

2001 Aug 16-19

8%

44

35

12

1



Which of the following statements best describe the current financial situation in your household -- you are saving a lot, you are saving a little, you are just managing to make ends meet on your income, you are having to draw on your savings, you are running into debt?

 




Saving
a lot
%




Saving a little
%

Just managing to make ends meet
%


Having to draw
on savings
%




Running into debt
%



MIXED/
NEITHER (vol.)
%




No
opinion
%

               

(NA) 2001 Aug 16-19

9

38

35

7

9

1

1

               

(RV) 2000 Sep 4-6

17

42

30

5

2

1

3

(NA) 1998 Apr 23-May 31 ^

10

48

29

5

6

--

2

(NA) 1994 Mar 7-8

7

41

36

7

8

--

1

(vol.)=Volunteered response

^ Gallup/General Motors Corporation; based on 5,001 national adults

Are you worried or not worried that you, personally, may lose your job in the near future?

BASED ON -- 599 -- ADULTS EMPLOYED PART-TIME OR FULL-TIME; ±4 PCT. PTS.

 

 


Yes,
worried


No, not
worried

DOESN'T APPLY/
NOT EMPLOYED
(vol.)


No
opinion

         

2001 Aug 16-19

18%

82

*

0

         

*Less than 0.5%

         

(vol.)=Volunteered response

   


 

Do you know someone, personally, outside of your family who has been laid off or fired recently, or not?

BASED ON -- 504 -- NATIONAL ADULTS IN FORM A; ±5 PCT. PTS.

 

 

Yes
%

No
%

No opinion
%

       

2001 Aug 16-19

43

57

*

       

1996 Apr 9-10 ^

58

42

*

1994 Mar 7-8 ^

60

40

*

1993 Dec 4-6 ^

52

47

1

1991 Oct 17-20 ^

50

46

*

1990 Oct 25-26 ^

50

49

1

       

*Less than 0.5%

     

^ WORDING: Which of the following statements apply to you ... you know people outside of your family who have been laid off or fired recently?

   


Now I'll read a list of job characteristics. For each, please tell me how satisfied or dissatisfied you are with your current job in this regard. First, are you completely satisfied, somewhat satisfied, somewhat dissatisfied, or completely dissatisfied with [RANDOM ORDER]?

BASED ON -- 599 -- ADULTS EMPLOYED PART-TIME OR FULL-TIME; ±4 PCT. PTS.

A. Your job security

 

 

Completely satisfied
%

Somewhat satisfied
%

Somewhat dissatisfied
%

Completely dissatisfied
%

No
opinion
%

           

2001 Aug 16-19

54

30

8

7

1

           

1999 Aug 24-26

48

33

11

7

1

1998 Oct

52

35

6

6

1

1993 May 10-12

46

33

9

11

1

1991 Jul 25-28

35

44

12

7

2

1989 Jul 18-21

45

42

8

3

2



K. The amount of money you earn

 

 

Completely satisfied
%

Somewhat satisfied
%

Somewhat dissatisfied
%

Completely dissatisfied
%

No
opinion
%

           

2001 Aug 16-19

24

46

18

12

*

           

1999 Aug 24-26

23

47

16

14

*

1998 Oct

21

48

19

11

1

1991 Jul 25-28

13

53

23

10

1

1989 Jul 18-21

16

56

19

8

1

           

*Less than 0.5%

         

(vol.)=Volunteered response



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