The stats aren't great, but they're better than they have been. FDU's latest poll finds New Jerseyans at least a bit more optimistic about the economy than they have been when asked the same questions in the past.
Still, 41 percent say they're worse off than they were a year ago—and only 32 percent say they're better off. But on some level, that's good news — when people were asked in 2011 how they were doing compared to 2010, the figures were even more discouraging.
That trend follows throughout the poll—answers are sounding like "not great" where they used to sound more like "pretty awful." So, there's progress.
Read FDU's full statement on its poll below, and take our Patch poll at the bottom of this post:
According to the quarterly consumer survey by ’s Silberman College of Business, 32% of New Jerseyans say that they are better off financially than they were last year, up seven points from a year ago, and the highest percentage measured since 2006. Two in five (41%) say they are worse off than a year ago, a seven-point decline from 48% in January of 2011, the lowest percentage measured since 2008. Renters (60%) are more likely than those who own a home (43%) to believe their finances will be better next year.
These improvements are seen across every income and age bracket, with the largest gain coming in the 18-29 age group, where 57% say they are better off than last year, up 19 points from the January 2011 figure. Those in the 0-$50k (44%) and $101-$150k (32%) income ranges both saw double digit declines (-11 and -18 points, respectively) in those saying they are worse off than a year ago.
Going forward, half (47%) believe they will be better off financially in the upcoming year; unchanged from January 2011. Fewer (19%) say they will be worse off in 2012 than they were in January 2011, an eight-point improvement from the January 2011 results (27%). This is an indication things may be leveling off in the Garden State.
“The economy is definitely improving,” said Sorin Tuluca, professor of finance at the Silberman College of Business. “What’s interesting is that consumers realize that the economic improvement does not mean that we will go back to the economy of the past. They are more realistic in assessing their economic prospects.”
The perceptions of business conditions in the state also have improved over one year ago, where 30% now say business conditions are better, compared to only 25% in January 2011. Those who think that business conditions have gotten worse declined by 10 points; from 56% in 2011 to 46% in 2012. Looking at the year ahead, New Jerseyans continue to be optimistic, as 54% say business conditions will improve, unchanged from 2011 (54%). Those saying business conditions will be worse declined from 26% to 21%.
“People are not necessarily more optimistic,” said Tuluca. “But they are definitely less pessimistic.”
Unemployment continues to be a factor in the state, with 63% of New Jerseyans saying they, or someone close to them has lost a job in the past year, essentially unchanged from 2011 (65%). Also, despite the general sense of overall economic improvement, the percentage of New Jerseyans “somewhat” or “very” concerned about losing their job in the upcoming year remains steady at 32%.
“While still moving slowly, employment is picking up,” added Tuluca. “In the past quarter, unemployment dropped by about 1% and this is reflected in the survey.”
Other key findings of the study:
- 32% say it is “somewhat difficult” or “very difficult” to make payments on their credit card, down from 35% in 2011.
- 58% are “very” worried about inflation
- Only 25% are confident the next generation will live better than us. Renters (36%) are more confident than homeowners (21%).
Given a windfall of $1,000, a plurality (49%) would use it to pay bills, and 12% would spend it, both unchanged from 2011. However, this year only 30% would save it, down from 36% a year ago. Renters (61%) are more likely than home owners (44%) to use the money to pay bills.
On the housing front, often a leading indicator of recovery, only 46% think prices will increase in value in 2012. This continues the downward trend from 49% in January 2011 and 56% in January 2010. Homeowners (16%) are more likely than renters (6%) to say housing prices will be flat in the upcoming 12 months.
The composite Index of New Jersey Consumer Intentions – what New Jersey consumers think they will do on a theoretical scale of 0 to 100 – is 41, up from 39 a year ago. The composite Index of New Jersey Performance – what consumers actually did in the past year – is 35, up from 31 a year ago and 28 in 2010. Typically, in stable times the difference between the two measures is between one and five points.
During bad times, such as 2009 and 2010 the difference was more than 10. In 2011, when the difference between the two measures was eight points (39 vs. 31), with a few exceptions, consume’ intentions significantly underestimated their end of year actuals (see Table 8). Currently, the difference is within the 5 point range, which might mean consumers are able to predict their spending in the upcoming year a bit better.
“There are signs that the most important asset of many households, the house, has bottomed out in value,” said Tuluca. “This explains people’s caution in spending, refinancing or otherwise using home equity as a piggybank.”
He added, “One hopes that the biggest lesson learned in this crises, is not to borrow more than you can repay against your home.
The telephone survey of 660 randomly selected adults throughout New Jersey who participate in their household’s financial decisions is sponsored by the Silberman College of Business at Fairleigh Dickinson University, and was conducted by Fairleigh Dickinson University’s PublicMindTM from January 2 through January 8, 2012 and has a margin of error of +/- 4% percentage points.
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