A new nationwide survey issued today by Citibank revealed that a full 50 percent of Americans believe they will be “upper middle class” or “well off” in five to ten years, despite the fact that just 16 percent of Americans describe themselves in those terms today. The survey found a deterioration in Americans’ outlook on the economy, local business conditions and their own financial situation, with 65 percent today viewing themselves as “just keeping even” rather than “upwardly” or “downwardly” mobile, as they struggle with rising gas, food and healthcare costs.
The survey, conducted by Hart Research Associates, found that Americans remain optimistic about their future economic prospects, despite a significant drop in their overall outlook on the economy since January. In fact, while nearly one in four Americans (24 percent) describe themselves today as “upwardly mobile,” nearly half (47 percent) believe they will be in a higher economic group within the next five to ten years than they are in now. Conversely, while 44 percent currently label themselves as “poor” or “working class,” compared to 16 percent upper middle class or well off and 39 percent middle class, only 32 percent believe it is very or somewhat likely they will be lower middle class, poor or below the poverty line in the next five to ten years.
“Despite a sluggish economic recovery, the survey reveals a silver lining that Americans are markedly optimistic that the future will be brighter for themselves and their families,” said Michelle Peluso, Chief Global Consumer Marketing and Internet Officer, Citi. “As people do their best to ‘keep even,’ they continue to hope and expect that, over the longer term, the economy will improve and they will be able to advance and achieve.”
Optimism Index: Citibank Economic Pulse Drops to 2010 Levels
The Citibank Economic Pulse, a quarterly measure of public attitudes toward the economy, reversed course. Overall, the Pulse, which combines eight survey questions into a single measure of overall economic status and future outlook, declined six points to -12, erasing the eight point gain in January. All components of the Pulse moved downward except Americans’ assessment of their own personal financial situation in relation to last year, which held steady, and comfort with their level of debt, which moved up three points. The biggest drivers of change are Americans’ view of what will happen over the next twelve months.
Among the survey’s key findings:
- Local business conditions: Only 51 percent believe that local business conditions will be better, a 12 point decrease since January and one point lower than September 2010. Some 30 percent expect conditions will be somewhat or much worse, while 15 percent expect them to remain the same.
- Personal financial situation: 63 percent of Americans believe their own personal financial situation will improve over the next 12 months, a decline of seven points since January.
- Consumer Spending: Just 30 percent say now is an excellent or good time to buy a major household item, a six-point decline since January and two points lower than September 2010.
- Bottoming Out: 65 percent of Americans still believe the economy has a ways to go to hit bottom, a six point increase since January and higher than any Citi survey in 2010.
Cost of Living: Gas, Food & Health Expenses Are Top Concerns
As the cost of living rises, hitting a record high in February according to the U.S. Labor Department, Americans cite gasoline (64 percent), food (32 percent) and health expenses (20 percent) as the expenses most impacting their cost of living. In addition, as local and state governments strive to balance budgets, Americans indicate there could be a negative impact on their quality of life from tax increases and cuts in state and local spending.
- 75 percent respond that an increase in state or local taxes would have a major (43 percent) or minor (32 percent) negative impact.
- 66 percent say cuts in state and local spending on police and firefighters would have a major (36 percent) or minor (30 percent) negative impact.
- 61 percent say cuts in state and local spending on education would have a major (42 percent) or minor (19 percent) negative impact.
- 60 percent say cuts in spending on roads, bridges and public transportation would have a major (23 percent) or minor (37 percent) negative impact.
- 57 percent say cuts in spending for social services for the poor, sick and elderly would have a major (34 percent) or minor (23 percent) negative impact.
Women’s Optimism Plummets; Nearly Half Identify as “Working Class” or “Poor”
For the first time since June 2010, men's and women’s views on the economy are significantly different, with women’s optimism declining dramatically. Men experienced a two point decline in April, bringing their index score to -8, while women dropped a full 10 points to -16. The January index for both was –6 and the September index for both was -14.
According to the survey, nearly half (49 percent) of all American women currently call themselves “working class” (31 percent) or “poor or below the poverty line” (18 percent), far higher than 38 percent of men who call themselves “poor” (13 percent) or “working class” (25 percent). Men are more likely to say they are well off or upper middle class (20 percent) than women (13 percent) and more likely to say they are very or somewhat likely to be well off in the future (54 percent) than are women (46 percent).
“With the cost of living on the rise, women may be feeling the impact more than men,” said Jonathan Clements, Director of Financial Education, Citi Personal Wealth Management. “The family budget can be a balancing act and the decrease in optimism, particularly among women, could be a result of both an increased pressure to make ends meet and the recognition that economic recovery is further off than many hoped.”
Mother’s Day: Moms Are America’s Sweethearts, Especially to Sons
As Mother’s Day approaches, the survey found that Americans credit both parents for imparting financial wisdom, yet cite mothers as particularly good at managing the family budget, getting a bargain and being frugal.
- 50 percent say their mother was better at getting a bargain, while 20 percent said their father was.
- 45 percent say their mother was better at managing the family budget, while 21 percent say their father was
- 37 percent say their mother was better at being frugal, while 21 percent say their father was
When it comes to showing their love and appreciation, Americans plan to spend more on Mother’s Day ($122) than on Valentine’s Day ($68) or Father’s Day ($88) and sons plan to spend more than daughters.
- More than one out of every four Americans (28 percent) plan to visit their mother and nearly as many (24 percent) plan to bring or send a gift.
- One out of five (20 percent) plan to call home and send a card respectively.
- Sons ($146) tend to spend more than daughters ($100) on Mother’s Day gifts.
- Sons (18 percent) are more likely than daughters (12 percent) to send flowers.
Citi conducted this nationwide survey as part of its ongoing effort to better understand changes in the needs of the consumers and communities the company serves.
Survey Methodology
Hart Research Associates conducted the telephone survey of 2,010 adults nationally from April 8-14, 2011. The Random Digit Dialed (RDD) survey has an overall statistical margin of sampling error of plus or minus 2.2 percentage points. The survey also included a sample of respondents who use only a mobile telephone.
Pulse Methodology
The Citi Economic Pulse is calculated by subtracting negative responses to each item from the positive responses for 8 Pulse items, divided by 8. The 8 Pulse items include: current condition of the economy in area; business conditions in area over the next twelve months; current employment opportunities in area; buying climate for big ticket items; personal financial situation compared to a year ago; outlook on personal financial situation for the next twelve months; comfort with current level of savings; and comfort with current level of debt. The Pulse scale can range from +100 (if every respondent gave positive response to each of the 8 questions) to -100 (if all respondents expressed consistently negative views).
About Citi
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Additional information may be found at www.citigroup.com.
Contacts:
Liz Fogarty, 212-559-0486
