Fully 50% of Americans believe they will be “upper middle class” or “well off” in five to 10 years, even though only 16% currently describe themselves in those terms, according to the latest quarterly Citibank Economic Pulse survey issued Friday.
In other findings, American’s outlook on the economy, local business conditions and their own financial situation has deteriorated, with 65% today viewing themselves as “just keeping even” rather than “upwardly” or “downwardly” mobile, as they struggle with rising gas, food and healthcare costs.
The telephone survey of 2,010 adults nationally, conducted April 8−14 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 24% describe themselves today as “upwardly mobile,” 47% believe they will be in a higher economic group than they are in now within the next five to 10 years.
Conversely, while 44% currently label themselves as “poor” or “working class,” compared with 16% upper middle class or well off and 39% middle class, only 32% believe it is very or somewhat likely they will be lower middle class, poor or below the poverty line in the next five to 10 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,” Michelle Peluso, chief global consumer marketing and Internet officer at Citi, said in a statement. “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.”
The Citibank Economic 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 survey moved downward in relation to last year except Americans’ assessment of their own personal financial situation, 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 12 months.
Among the survey’s key findings:
- Local business conditions: Only 51% believe that local business conditions will be better, a 12-point decrease since January and one point lower than September 2010. Some 30% expect conditions will be somewhat or much worse, while 15% expect them to remain the same.
- Personal financial situation: Sixty-three 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% 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: Sixty-five percent of Americans still believe the economy has yet to hit bottom, a six-point increase since January and higher than any Citi survey in 2010.
As the cost of living rises, Americans cite gasoline (64%), food (32%) and health costs (20%) as the expenses most affecting their cost of living. In addition, they say tax increases and cuts in state and local spending could negatively affect their quality of life.
- 75% percent say that an increase in state or local taxes would have a major (43%) or minor (32%) negative effect.
- 66% say cuts in state and local spending on police and firefighters would have a major (36%) or minor (30%) negative effect.
- 61% say cuts in state and local spending on education would have a major (42%) or minor (19%) negative effect.
- 60% say cuts in spending on roads, bridges and public transportation would have a major (23%) or minor (37%) negative impact.
- 57% say cuts in spending for social services for the poor, sick and elderly would have a major (34%) or minor (23%) negative effect.
For the first time since June 2010, men's and women’s views on the economy have diverged significantly, 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, 49% of all American women currently call themselves “working class” (31%) or “poor or below the poverty line” (18%), far higher than 38% of men who call themselves “poor” (13%) or “working class” (25%). Men are more likely to say they are well off or upper middle class (20%) than women (13%), and more likely to say they are very or somewhat likely to be well off in the future (54%) than are women (46%).
“With the cost of living on the rise, women may be feeling the impact more than men,” Jonathan Clements, director of financial education, Citi Personal Wealth Management, said in the statement. “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.”
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.
- Half say their mother was better at getting a bargain, while 20% said their father was;
- 45% say their mother was better at managing the family budget, while 21% say their father was;
- 37% say their mother was better at being frugal, while 21% 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%) plan to visit their mother and nearly as many (24%) plan to bring or send a gift.
- One out of five 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%) are more likely than daughters (12%) to send flowers.