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Eighty-five percent of Americans believe the country is currently in a recession, according to the results of a new online survey conducted and analyzed by The Nielsen Co.
Nielsen said confidence in the economy plunged 17 points from the second half of 2007 to the first half of 2008. [The Nielsen Co. is the parent company of Progressive Grocer.] Not surprisingly, 35 percent of consumers surveyed say the economy is their biggest worry when they look ahead over the next six months.
Debt comes in a distant second, as the biggest worry among 15 percent, followed by work/life balance (8 percent). International affairs, such as war and terrorism, rank near the bottom of the list, at 2 percent and 3 percent, respectively. Even immigration, a hot-button political issue, is only cited by 2 percent of respondents.
"With high gas prices, food inflation, and other economic pressures, it's not a surprise that the economy is a top concern for many Americans," said David Parma, global head of Customized Research, The Nielsen Co. "Consumers have many reasons to feel pessimistic right now, and even if we're not officially in a recession, consumers certainly feel like we're in one."
Overall, Americans' view of the economy is bleak, said Nielsen. Sixty-six percent of respondents have a pessimistic view of their local job prospects over the next 12 months, with 50 percent saying it's not so good, and 16 percent calling it downright bad. Just 3 percent consider their local job prospects excellent.
Despite all of this negativity, however, many Americans manage to see their own financial affairs in a positive light. More than half (51 percent) say the state of their personal finances remains excellent or good, while just over one-third (36 percent) rank their situation as not so good.
For the most part, consumers are not convinced the world will enter a global recession sometime in the next 12 months; 38 percent say they don't believe it will take place at all, while 46 percent say they don't know if it will or not. Just 15 percent say a global recession is definitely on the horizon.
Should the economy take a turn for the worse, inflation tops U.S. consumers' concerns (62 percent), followed by unemployment (50 percent), falling property prices (25 percent), and interest rate increases (21 percent).
While government officials are hopeful this spring's tax rebate checks will stimulate the economy, consumers appear to view any potential windfall more as a means of digging out of debt, than as an excuse to splurge on goods, Nielsen said.
Sixty-nine percent of consumers believe the next 12 months are either a bad, or not so good, time to buy things they want or need. Once they've covered essential living expenses, 41 percent say they use any spare cash to pay off debt, credit cards, or loans. More than a third (36 percent) play it safe, putting extra funds into savings. Nearly a quarter of consumers (24 percent) report having no spare cash.