American Pessimism on Economy Grows 08/28 06:17
WASHINGTON (AP) -- Americans are more anxious about the economy now than
they were right after the Great Recession ended despite stock market gains,
falling unemployment and growth moving closer to full health.
Seventy-one percent of Americans say they think the recession exerted a
permanent drag on the economy, according to a survey being released Thursday by
Rutgers University. By contrast, in November 2009, five months after the
recession officially ended, the Rutgers researchers found that only 49 percent
thought the downturn would have lasting damage.
And that was when the unemployment rate was 9.9 percent, compared with the
current 6.2 percent.
"They're more negative than they were five years ago," said Rutgers public
policy professor Carl Van Horn.
The slow pace of improvement during most of the recovery, now in its sixth
year, has eroded confidence and slowed a return to the pay levels that many
enjoyed before the economy suffered its worst collapse since the 1930s. About
42 percent of those surveyed say they have less pay and savings than before the
recession began in late 2007. Just 7 percent say they're significantly better
The survey results dovetail with estimates that the median household income
was $53,891 in June, according to Sentier Research. That's down from an
inflation-adjusted $56,604 at the start of the recession.
Each year of subpar growth has compounded the anxieties of many Americans.
In contrast to the robust snapbacks that coincided with most economic rebounds,
this recovery proved tepid well after the recession had ended. Consumers
struggled with an overhang of mortgage debt and the risk of layoffs for much of
the recovery. A majority of those surveyed say they fear that job security has
all but disappeared and that they'll have little choice but to work part time
"No current worker had ever experienced this before," Van Horn said. "This
recession was everywhere."
Researchers at Rutgers' John J. Heldrich Center for Workforce Development
surveyed online a national cross-section of 1,153 adults between July 24 and
August 3. The margin of error was plus or minus 3 percentage points. The survey
is part of a broader series of polls taken over multiple years to study the
consequences of the recession for workers.
Recent evidence of economic strength has done little to brighten most
Americans' outlooks. The Standard and Poor's 500 stock index has surged more
than 170 percent since bottoming in March 2009. Yet only 14 percent of the
respondents said the gains have affected them a lot --- a sign of either meager
investments or the extent to which families unloaded their stock holdings near
the bottom of the market.
Employers have added an average of more than 244,000 jobs a month since
February, a vigorous pace that recalls the dot-com era of the 1990s. Over the
past 12 months, the unemployment rate has dropped more than a full percentage
point from 7.3 percent to a nearly normal 6.2 percent.
This month, job growth helped propel the Conference Board's consumer
confidence index to its highest reading since October 2007. The index often
tracks the unemployment rate.
The gap between the index and the Rutgers survey likely reflects the type of
questions posed by the university researchers. They asked about family
finances, job satisfaction, retirement plans and the specific consequences of
the recession. By contrast, the confidence index asks about broader perceptions
of business and employment conditions and plans to buy autos, homes and