December 15, 2010

For Public, Tough Year Ends on a Down Note

Section 2: National Economy, Personal Finances, Real Estate

The public continues to take a dour view of the nation’s economy. Nearly nine-in-ten (89%) describe economic conditions in this country today as poor (45%) or only fair (44%). Just 9% say conditions are excellent (1%) or good (8%). The percentage saying the economy is excellent or good has remained virtually unchanged since Obama took office in early 2009.

While economic opinion is overwhelmingly negative on balance, the percentage calling the economy poor has declined nine points since October (from 54% to 45%), while the percentage saying conditions are only fair has risen six points (from 38% to 44%). As a result, about as many call conditions only fair (44%) as poor (45%); for much of the previous two years, more called the economy poor than only fair.

Only about one-in-ten Republicans, Democrats and independents say economic conditions are excellent or good. But Republicans and independents are more likely to view the nation’s economy as poor. Half of Republicans (50%) and 47% of independents say national economic conditions are poor, compared with 39% of Democrats. In comparison, through much of the final year of the Bush administration, more Democrats than Republicans said the economy was poor.

Some See “Green Shoots”

Nearly half of the public (48%) says that it will be a long time before the economy recovers. About as many (50%) say either that the economy is recovering (17%) or will recover soon (33%).

These evaluations are largely unchanged from earlier this year, although more say the economy is recovering than did so in September (17% now, 10% then).

There are indications of increased optimism about the economy, particularly among people with more education and higher incomes. In the current survey, 57% of college graduates say the economy is either recovering (21%) or will recover soon (35%). That compares with 42% who say it will take a long time for the economy to recover.

In September, college graduates were evenly divided over the prospects for a quick recovery (48% recovering/will recover vs. 50% long time). Opinions among those with less education have shown almost no change.

While opinions about prospects for an economic recovery remain divided along partisan lines, more Republicans (44%) say the economy is recovering now (11%) or will soon (33%) than did so in September, when 35% said that the economy was recovering (6%) or would recover soon (29%).

Personal Financial Ratings Flat

As is consistently the case, the public rates their own personal financial situation somewhat better than national economic conditions. Nonetheless, current ratings have remained stagnant over the past 12 months: Just 5% rate their own personal financial situation as excellent while another 30% call their personal financial situation good; 40% say it is only fair and 23% say poor.

Despite modest personal economic ratings, most expect at least some improvement in the coming year: 56% say they think their own economic situation will improve a lot (7%) or some (49%) over the next year. One-in-five (20%) expect their situation to get a little worse, 6% think it will become a lot worse, and 14% volunteer that they expect it to stay the same. While optimistic on balance, personal financial expectations have shown no improvement over the course of 2010.

Even among those who rate their personal financial situation as poor, about half (52%) expect at least some improvement in their financial situation in the coming year.

Job Market Not Recovering

With unemployment hovering close to 10%, the public takes an overwhelmingly negative view of the job market. Nearly eight-in-ten (79%) say job opportunities in their area are difficult to find, compared with just 14% who say there are plenty of jobs available in their community.

While down six points from March, the percentage saying that jobs are difficult to find remains among the highest numbers recorded by Pew Research surveys since the question was first asked in June 2001.

Large majorities of all demographic groups evaluate the job situation as difficult, but there are significant differences across socio-economic groups. College graduates by a margin of 72%-20% say that jobs in their area are difficult to find. By comparison, the balance of opinion is more one-sided among those with some college experience (85% jobs difficult to find, 10% plenty available) and those with no college experience (82% jobs difficult to find, 12% plenty available).

A similar pattern can be seen across income groups with those at the top of the scale describing jobs as difficult to find, but by a less overwhelming margin than those at lower income levels.

Working People See Tough Job Market in Their Field

Even among those currently employed, almost two-thirds (65%) say jobs in their line of work are difficult to find in their community; 30% say there are plenty of jobs available. In February 2008, as the unemployment rate began to climb, fewer than half (46%) of employed people said jobs were hard to find in their line of work. By December 2008, 56% said jobs were scarce in their field.

Those who describe the financial condition of the company they work for as only fair or poor see a more difficult job market for themselves than those who say their employer is in excellent or good shape. Nearly eight-in-ten (79%) of those who say their employer is in only fair or poor shape say that jobs in their line of work are difficult to find, compared with 58% of those who describe their employer as in excellent or good financial shape.

Unemployment Affects Many Households

Almost half (46%) of Americans say that someone in their household has been without a job and looking for work over the last year. This number has fluctuated in recent months, but is up from just 28% in February of 2008, when the national unemployment rate was closer to 5%.

Young people continue to be among the most likely to experience unemployment first-hand: 62% say that they or someone in their household have been unemployed and looking for work over the past 12 months.

Socio-economic differences persist as well, with half or more of those without a college degree and those in households earning less than $30,000 annually reporting household unemployment within the last year.

Democrats and independents (50% each) are more likely than Republicans (36%) to say that someone in their household has been unemployed over the past 12 months.

Most Workers Say Employer Financially Healthy

Despite a bleak view of the job market and widespread household unemployment, most working people deem their employer to be financially healthy. Roughly two-thirds of workers (64%) say the company that employs them is in either excellent (23%) or good (41%) shape. About a third (34%) say their employer is in only fair (27%) or poor (7%) financial shape. These numbers have changed little over the past two years.

Views of the Real Estate Market

About six-in-ten (63%) say that home prices in their local area have decreased over the past year. Nearly three-in-ten (29%) say home prices have gone down a lot, while about as many (34%) say they have gone down a little. Just a quarter (25%) say home prices have increased in their area over the last year. Current ratings of their local real estate market performance are similar to those in October of last year and December 2008.

There are some regional differences in views of the housing market. While 56% of those living in the East say prices have declined, this is considerably less than the proportion of those in the Midwest (70%) and West (66%) who say this; 59% of Southerners say prices have declined. In particular, Westerners and Midwesterners are more likely than others to say that prices have gone down a lot over the past year (36% of Westerners and 33% of Midwesterners say this, compared to 24% of those in both the South and the East).

Although majorities of those in all income groups say prices have decreased in the last year, as in the past, those with family incomes under $30,000 are less likely than others to say that prices have gone down. Today, about half of those with lower incomes (52%) say home prices have decreased, compared with 70% of those with incomes of $75,000 or more.

Yet most Americans (57%) expect house prices to rise over the course of the next few years and just a third (32%) say that house prices in their area will go down over this period. These expectations are about the same as they were in July 2008.

There are few demographic differences in expectations about the real estate market. Those with family incomes of $75,000 or more are more likely than others to say the
prices will rise over the next few years (66%, compared with 58% of those with incomes between $30,000 and $74,999 and 51% of those with lower incomes).