The economy is looking better—but are you better off?
How’s this for a paradox? Consumers feel more confident about the economy in 2010—but not about their personal finances. How can the economy improve, but not our financial well-being?
In late December 2009, the Surveys of Consumers reported that consumer confidence was considerably higher by the end of 2009 compared to the end of 2008. (This survey has been conducted every month by the University of Michigan for over 60 years.)
But confidence is relative. A slight majority (54%) in December 2009 still expected unfavorable conditions in 2010, which is better than the large majority (76%) who felt that way in December 2008.
“While most think the worst is over,” says Surveys of Consumers chief economist Richard Curtin, “the problem is that consumers are still quite uncertain about when prospects for their own finances will improve.”
Almost half (49%) reported a worsening personal financial situation in December 2009. About the same proportion do not expect any improvement in their finances in 2010. Many expect continued declines.
There are, however, some reports of income improvements—but this tends to be among higher income households. This increases the gulf between the rich and the poor (see my December 29th post on “class warfare” as one of the top values-related stories for 2010).
Are you living the paradox? Are more confident about the economy while also facing worse personal finances? How about those around you?