Americans See Brighter Ecnomic Future

From CNBC: American See Brighter Economic Future: Survey

The current pessimism runs so deep that, for the first time in the survey's two-year history, no statistically significant group (not even 1 percent) of the more than 800 survey respondents rated the economy as excellent. In fact, the percentage of Americans who rate the economy as poor ratcheted up to 70 percent from 65 percent last quarter and 33 percent a year ago.

The pessimism looks set to have real economic consequences: Americans plans to spend on average just $704 on their holiday shopping, down 4.6 percent compared with a year ago. One in 10 Americans plan to spend nothing on holiday shopping, double the one in 20 from a year ago.

The percentage of Americans who believe the economy will improve next year surged 11 percentage points from September and stands at 39 percent. In fact, the level of optimism is higher than at any time in the past 10 months, and appears connected with a change in administrations.

Regardless of what Americans believe about the future of the economy, they are not optimistic about a series of key economic variables. Americans think their wages will grow by only 3.1 percent next year, down from 5.3 percent a year ago; they believe their home prices will decline by 1.6 percent, the most in the life of the survey, and considerably below the 0.3 percent decline envisioned in September. A year ago, Americans thought their home prices would rise by 2.2 percent over the coming 12 months.

One positive outlook for the future is that Americans see prices rising by 5.8 percent, the smallest increase since the survey began asking the question in March 2007. The percentage is almost half the expected increase registered in June when oil and food prices were surging. Also on the plus side, while Americans rate the national economy poorly, they have a better view of their personal situation. More than half of Americans (52 percent) rate their personal financial situation as good or excellent, compared to just 4 percent when asked about the overall economy.

Americans plan to spend less on shopping this holiday season, with 30 percent saying the higher cost of necessities is the No. 1 reason for cutting back. Sixteen percent said it was because they or a family member are unemployed, and 15 percent said it was because they are having trouble paying regular bills.

52 percent of respondents said it is a somewhat bad or very bad time to invest in the stock market, up from 27 percent in October, 2007; 35 percent of those surveyed said they are not confident or only somewhat confident their money is safe in a federally insured bank account; and 37 percent surveyed said they would be willing to buy a car from a bankrupt auto maker, while 52 percent said they would not, and 11 percent were unsure.