The past few years have been tough ones for our economy, with the market dropping, unemployment skyrocketing, and other general economic indicators not being too favorable. A lot of people have lost a lot of their net worth during that time, and many of them were on the point of despondency because they didn’t know what they were going to do now that so much of their money had just disappeared.
Surveys Show People Are Optimistic
This year, however, people are starting to believe that things are turning around. People are beginning to feel more financially secure, and people are once again feeling more favorable about investing in the stock market.
Americans said they’re more financially secure today than a year ago, after a recovery in the stock market increased confidence that the worst effects of the recession are over, according to Bank of America Corp.The Merrill Lynch Affluent Insights Quarterly, which surveyed 1,000 people with investable assets of at least $250,000 from Sept. 13 to Oct. 7, found that 41 percent said they’re better off this year compared with the same period last year. About 39 percent of Americans said they’re risk-averse about investing, down from 50 percent in the previous survey.
The Standard & Poor’s 500 Index gained about 23 percent in 2009 and 6 percent this year, compared with a 38 percent drop in 2008.
“There’s a very clear split in terms of how affluent Americans see their own personal financial fortunes and the larger U.S. economy,” Andy Sieg, head of retirement and philanthropic services for Bank of America, said in an interview. “They view their personal financial picture as being far rosier.”
People believe that things are getting better, and if the stock market picture is any indication, things are getting a bit better. We’re on our way to gaining back what we lost in 2008.
Will The Economy Improve In 2011?
So what do people believe will happen in 2011, will things continue to improve?
About 78 percent of those surveyed are confident their economic circumstances will improve in 2011, the study said. Economists surveyed by Bloomberg News earlier this month projected the unemployment rate will average 9.6 percent this year and 9.3 percent in 2011.
So a majority of people thought that their personal economic circumstances would continue to improve in 2011.
Growth Of Economy Anemic
Economists think that unemployment will continue to go down, however, it is still rather high at over 9 percent. Others say that with economic growth being so anemic lately, it may be a while before the unemployment rate drops significantly.
Employers haven’t done much hiring in recent months with economic growth so weak. The economy grew 1.7 percent in the April-June period, an anemic pace in normal times and even worse in the aftermath of the Great Recession.
Economists expect that the Commerce Department on Friday will report slightly better growth of 2 percent for the July-September period. But that’s still sluggish after a deep recession.
The economy needs to grow by at least 5 percent for a full year to bring down the unemployment rate by a percentage point, economists estimate. The jobless rate is currently 9.6 percent, down only slightly from 9.7 percent in January.
In reading all of these reports, I almost wonder if people are optimistic for the coming years mainly because they don’t think things can drop much further? Things have gotten so bad that they think – can it really get any worse?
What do you think? What are the reasons for optimism among investors? Is it due to things really getting better, or just hope that it will? Will we see the economy grow at a larger rate? Or will things continue to be anemic?
I certainly can’t speak for others but I would say my husband and I are not better off than last year. Our retirement accounts have taken significant hits, the value of our home has continued to drop and his employment is looking a bit shaky. Our medical insurance and co-pays have risen considerably. Food costs, utilities, etc. have continued their climb and he has received no pay raise this year.
I think they interviewed the wrong people. How many people do you know who have $250,000 in investable assets? I personally know of only two for certain out of hundreds. Those that have that kind of money to invest will profit with a rising stock market, those that don’t, won’t. The survey is not an accurate indicator of the nation’s optimism rating or of overall financial health.
I think a lot of people just tie in the economy with how their 401(k) is looking and since it has been on a recent upswing, people forget.
I think that the average American is just dying to be more optimistic.
I can’t see how in just one short year, after the crisis we were just in, that we can be any better off financially.
Not yet, anyhow
Nope, not doing any better. I’m at a financial low point now. I think the economy isn’t going to get better for YEARS. I’ve also heard several economists say the same thing: Things won’t be back to normal for another 5 or 6 years, at least. I’ve heard projects as late as 2018.
*projections, that is. Not projects, LOL.
Not better than last year, but did learn a lot.
For me trying to get more for less helped.