A Quarter of Americans Struggling with Debt, including Highest-Income Earners
More than Half of Americans Not Taking Summer Vacations, Citing the Economy
NEW YORK–(Business Wire)–
A new nationwide survey issued today by Citi, and conducted by Hart Research
Associates, shows that nearly two-thirds of Americans (62 percent) believe the
economy has yet to hit bottom. This represents a 3 point decline from March,
when 59 percent said we have a long way to go, and a return to the level
measured in September (63 percent). According to the survey, just one-third (33
percent) believe the economy has hit bottom, even though Commerce Department
data indicates the U.S. economy resumed growing in 2009`s third quarter.
In addition, the data reveals that, as we pass the halfway point of 2010,
Americans` expectations for when the economy will stabilize for their households
have slipped quite far into the future, with 62 percent believing it will be at
least two or three years, if not longer, and more than one quarter (28 percent)
believing it will be four or more years until the economy stabilizes for their
At the same time, however, Americans` views on current economic conditions, as
well as their outlook on their own personal financial situations, are improving
or holding steady.
According to the data:
* Twenty-four percent say the local economy where they live is good or
excellent, up from 19 percent in March.
* The percentage of Americans who say their personal financial situation is
better now than a year ago has improved slightly since March (17 percent versus
15 percent). Fifty-two percent said their personal financial situations are
about the same as they were a year ago.
* Although down slightly from March, 64 percent of Americans remain very or
somewhat optimistic that their financial situation will improve in the next
twelve months, compared to 32 percent who are somewhat or very pessimistic.
Americans` views on local employment opportunities, however, remained weak, with
85 percent reporting opportunities as only fair (36 percent) or poor (49
percent). In a measure of potential consumer demand, 62 percent of Americans
believe that, in the current environment, it is only a fair (30 percent) or poor
(32 percent) time to make a major household purchase, up from 61 percent (27
percent and 34 percent, respectively) in March.
“Clearly, the mood of Americans has been heavily influenced by the unemployment
numbers here at home and the news of economic woes in Europe,” said Jonathan
Clements, Director of Financial Education at Citi Personal Wealth Management.
“And yet, if you dig deeper, consumers are actually feeling a bit better about
their own finances and the local economic outlook. The big question is, could
the gloomy news become a self-fulfilling prophesy, prompting consumers to
restrain their spending, thus hurting the economic recovery?”
A Quarter of Americans Struggle with Debt, Highest-Earning Americans Impacted As
Americans of all ages and income levels are struggling with debt. The survey
found that, while no one category of debt presents a major problem to more than
about a tenth of U.S. families, as many as 25 percent responded that there is at
least one category of debt that is a major challenge or is becoming
* Of those surveyed, health expenses are a major or unmanageable problem for 11
percent followed by credit card debt (9 percent). Including other categories of
debt such as mortgage debt (6 percent), student loans (5 percent), consumer
loans (2 percent), and child support (1 percent), a full quarter of the public
reports a major or unmanageable problem with at least one category of debt.
* People in their 30s (32 percent) report having at least one area of debt that
is a major or unmanageable issue, higher than any other age group. This compares
with Americans under age 30 (28 percent), in their 40s (30 percent), and in
their 50s (27 percent) who responded similarly.
* Interestingly, among the top-income bracket (Americans earning more than
$150,000 annually), 21 percent report having at least one area of debt that is a
major or unmanageable issue. This compares to 15 percent of Americans earning
$75,000-$150,000; 22 percent earning $50,000-$75,000 and 33 percent earning less
than $50,000 annually.
“It is startling to see more than a fifth of high-income earners express
concerns about their debt,” noted Clements. “This may speak to their
overconfidence during the boom years, as they took on first and second mortgages
to buy real estate and pay other expenses.”
Summer of the `Stay-cation`
Reflecting current economic worries, three in five Americans responded they will
either not vacation at all or will stay home during their time off this summer.
* A full 51 percent of Americans say they will not take any vacation at all this
* Sixty percent of Americans will either not vacation at all or else will stay
at home as their vacation.
Clements added, “Given the sluggish economic recovery, it is no surprise that
Americans remain conservative with their spending, saving and summer vacation
plans. Americans` fiscal discipline is admirable. Still, lower consumer spending
may slow the economic recovery.”
Majority of Americans Believe They Are Living the American Dream, Especially
Despite the current economic challenges, Americans remain remarkably optimistic.
The survey found that 53 percent of Americans believe they are living the
American dream and nearly three in four (73 percent) say they are either living
the dream now or expect to live the dream in the future. Older Americans lead
the way in responding they are currently living the dream, while young Americans
* Sixty-five percent of Americans over age 70 believe they are currently living
the American dream.
* Comparatively, more than half of Americans in their 60s (56 percent), 50s (55
percent), and 40s (51 percent) also say they are currently living the American
* Forty-seven percent of Americans under age 30 say they are currently living
the American dream, while just 43 percent of Americans in their 30s say they
* A full 83 percent of 18-to 29-year-olds believe they are or will live the
American dream in the future, while people in their thirties remain hopeful, but
less so (75 percent).
By 56 percent to 24 percent, a majority of Americans believe that the American
dream is more defined by family, faith and freedom than it is defined by
material goods or financial elements such as housing, income or lifestyle.
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
Hart Research Associates conducted the telephone survey of 2,005 adults
nationally from June 22-29, 2010. 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 panel of respondents who use only a mobile
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 or www.citi.com.
Liz Fogarty, 212-559-0486
Copyright Business Wire 2010