ANN ARBOR – Consumers have low expectations for the near-term U.S. economic outlook because they still believe the country is in a recession despite it officially being over for more than two years, the research professor and director of consumer surveys for Thomson Reuters said Thursday.
Richard Curtin said while policymakers have tried unemployment benefit extensions and tax cuts to turn consumer sentiment around, those do not get at the heart of consumer concern – the value of their home.
Home ownership represents the most significant investment for Americans, Mr. Curtin said, and right now that is their most troubling liability.
“(There is) really quite remarkable evidence that consumers do not see this recession ending anytime soon in the value of their home,” he said.
Consumers have not lost out all hope for better days ahead, but the recession and aftershocks may have permanently transformed how consumers act, at least in the next few years, Curtin said.
Half of the people surveyed say they are worse off financially than a year ago – a sentiment expressed for three years now. And for the past three years, families have also said their incomes will not increase in the year ahead.
Personal financial progress has become an American tenet, he said, but most families believe their home values will drop by at least 1.25 percent over the next five years after already suffering losses.
“Consumers are expecting close to stagnation in the year ahead,” he said of their outlook on the U.S. economy.
Many people do not feel they have enough savings to live a comfortable retirement, which is part of why many Baby Boomers have yet to leave employment.
One in three men ages 65-69 is still working, while one in four is once they reach ages 70-74. One in four women ages 65-69 is still working, while just 13 percent of women are working into ages 70-74.
In comparison, more than half of women and men under the age of 25 are unemployed.
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