It is quite clear the US economy is sliding back towards recession, if not still in it. The average consumer understands that, yet the average economist doesn't.
How is it that the average consumer has a better grip on the economy that the average economist? Regardless of the answer, here are some interesting survey results from Americans Fear "Double Dip" Recession & European Financial Problems.
- 92% say the US is still in recession
- 65% fear a ‘double dip’ recession
- 57% are fearful about running out of money in the next year
- 44% could easily see their family slipping into bankruptcy if things get worse
- 42% say they will spend less money than they did over the last 3 months, while just 10% will spend more. 48% report their personal spending will likely stay even
- 09% say the US is in a 1930s style economic depression
- 72% say Europe’s financial problems likely to hurt US
- 42% say that they or their spouse has had wages or salary reduced
- 34% say they or their spouse lost their job or has been laid off
- 33% have taken on more hours or another job to try and make ends meet
- 28% dipped into a planned retirement account like an IRA or 401K because they needed the money
- 09% have had their house foreclosed on
- 08% had their child delay college (or graduate school) or drop out to save money
- 20% expect their personal finances will recover by the end of 2011, 27% say after the end of 2011, 24% say their personal finances won’t ever fully recover
“Attitudes towards the current economic climate should be very concerning for those who sell consumers goods and services. The perception that the economy is likely slowing down again is leading consumers to tighten their belts and keep their wallets and purses closed. Consumer marketers will need to figure out how to best dial up the perceived value of what they are selling in order to stay on track”, said Bradley Honan of StrategyOne.
For a discussion of whether or not the recession has ended, please see NBER Likely to say "Recession Ended" July 2009; Assessing the Real Time Probability US Back in Recession
At this juncture, the debate as to whether the recession has ended or not is actually moot. The pertinent factor is: If there was a recovery, it now seems over.
Looking ahead, attitudes rule. With consumer spending weak and weakening, and now that the stimulus has run its course, the odds the 3rd and/or 4th quarter GDP numbers will be negative are quite high, as are the odds of double digit unemployment numbers by the end of the year.
Mike "Mish" Shedlock
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