- Nationally, the economy appears strong -- many say standard of living is better
- But on a personal level, no marked change in spending habits
WASHINGTON, D.C. -- In line with a recent raft of good economic news -- including robust gross domestic product growth in the third quarter and November's strong jobs report -- nearly six in 10 Americans said in November that their standard of living was getting better (58%). This is close to the highest monthly value in the question's seven-year history (60%), and nearly double the estimates seen at the depths of the recession.
These findings come on the heels of other broad economic indicators pointing to renewed vitality. Gallup's Economic Confidence Index, for example, nearly matched its highest monthly post-recession score of -8 in November, a huge improvement from the drop to -60 measured in October 2008.
Despite Good Economic News, Small Changes in Personal Finance
Even as Gallup's indicators of the public's views of the national economy approach new heights, Americans' views about their own finances and self-reported financial habits have shown, at best, only moderate improvement compared with their two-year averages. Importantly -- as has consistently been the case -- large majorities of Americans continue to say they are watching their spending very closely (88%) and are cutting back on spending (61%). These attitudes appear to be fundamental to the way Americans approach their spending, and thus are not subject to much change. Meanwhile, many still feel uneasy about their personal financial situation -- half of U.S. adults say they would be able to make an emergency purchase, while less than half (47%) say they are feeling pretty good about the amount of money they have to spend. Less than half of Americans also report that they are feeling better about their financial situation (47%) -- even as the prices of critical necessities decline.
While the general thrust of Americans' responses to these questions reveals a financially cautious public focused more on saving than spending -- potentially trouble for an economy that relies heavily on consumer spending to generate economic growth -- there is evidence that Americans felt marginally more secure in November relative to the recent past, perhaps a sign that improved national economic indicators are being felt more locally. For instance, the 47% saying they are feeling better about their financial situation is up by three percentage points over the 2013-2014 average. Likewise, the percentage of Americans saying they are cutting back on the amount of money they spend is down by three points over the same two-year average.
The history of asking these personal financial questions indicates much more stability in Americans' minds than when they are asked about the national economy. In other words, they are much more willing to shift their views of what is happening at the national level than they are to do so regarding their own financial situation. These data do show a slight change in favor of Americans feeling more economically secure and thus comfortable in their spending, but by no stretch can it be said that Gallup has measured a sea change in Americans' perceptions of their personal financial status.
Last week's jobs report from the Bureau of Labor Statistics seemed a signal to many economic commentators that the recovery may now become easier for average Americans to appreciate. Nationally, Gallup's economic and standard of living data support this notion, as more Americans now say their standard of living is getting better than say it is getting worse. Meanwhile, Gallup's Economic Confidence Index is perking up, even if it is still in negative territory.
But when measuring the personal spending and saving habits -- the life and blood of the U.S. economy -- of individual U.S. residents, the intensifying recovery narrative becomes less compelling. Of course, there may be a lag in how quickly propitious macroeconomic data trickle out into the larger economy. But stagnant feelings about personal finances may provide one explanation as to why President Barack Obama has not seen a marked bump in his job approval rating even as good economic news continues to materialize.
Results for this Gallup poll are based on telephone interviews conducted Nov. 1-30, 2014, on the Gallup U.S. Daily survey, with a random sample of 14,607 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. For results based on the total sample of national adults, the margin of sampling error is ±1 percentage point at the 95% confidence level.
Each sample of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by time zone within region. Landline and cellular telephone numbers are selected using random-digit-dial methods.
Learn more about how the Gallup U.S. Daily works.