Monday AM July 26th, 2010

Even with the Commerce Department data indicating resumed growth, nearly two-thirds of Americans believe the economy has yet to hit bottom, according to a new survey. Ed Mayberry reports.


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Jonathan Clements, Director of Financial Guidance at Citi Personal Wealth ManagementThe nationwide survey shows that 62 percent believe the economy has yet to hit bottom. A quarter report they are struggling with debt, including the nation’s highest-income earners. Jonathan Clements is director of Financial Guidance at Citi Personal Wealth Management.

“The question rises that ‘why is it that Americans feel the economy is not getting better?’ I think the answer is the unemployment rate. We were at 10.1 percent in October 2009. In June, which is the latest reading, we were at 9.5, so there’s been some improvement there. Nonetheless, a lot of people go to work every day and they worry about getting laid off. Our most valuable asset is our human capital — our ability to pull in a paycheck. And when we feel that asset is threatened, we’re just not going to feel that good about the economy.”

Clements wonders if the survey results indicate a self-fulfilling prophesy, prompting consumers to restrain their spending, thus hurting the economic recovery.

“If people are nervous that the economy might turn down again, if they’re worried about losing their jobs, they won’t go to the mall and as a consequence, the economy will slow once again. And one indicator of how reluctant people are to spend shows up when we ask people about what their vacation plans are for this summer. We found that fully 51 percent of Americans plan not to take a vacation this summer. So clearly, people aren’t that anxious to open up their wallets and make big purchases, particularly on items they consider to be discretionary, like taking a vacation.”

Despite the current economic challenges, 53 percent believe they are living the American dream — especially older Americans.

Ed Mayberry, KUHF News.

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