1st Quarter Report on New Jersey Consumer Attitudes

MADISON, NJ - According to the quarterly consumer survey by Fairleigh Dickinson University’s Silberman College of Business, 26% of New Jerseyans say they are better off financially than they were a year ago, better than this time last year, but essentially flat compared to the last quarter. At the same time, 45% say they are worse off financially, only a little improved from 48% in January.

Those between 18 and 44 years of age are significantly more likely than those 45 and over to report they are better off now than a year ago.

“Most recoveries favor those who are younger and better prepared to take the new jobs generated by increased economic activity,” said Sorin Tuluca, professor of finance at the Silberman College of Business.

Income is also an important dividing line. Among those with incomes less than $100,000 per year, more than twice as many report they are worse off than report they are better off, but among those with household incomes over $100,000 more report they are better off than worse off.

 “Those with higher incomes benefit from a return to normalcy in the financial markets, either from an increase in the credit available to them, or from an increase in the value of their investments,” Tuluca said.

Looking at the year ahead, 40% say their financial well-being will improve, a drop from 46% in January. Meanwhile 30% think they will be worse off in the coming year.  Those in households with income over $100,000 are distinctly more optimistic than those with a lower income.

“The economy has picked up but very slowly and unevenly,” said Tuluca. “This makes New Jerseyans cautious.”

A large majority, 63%, are “very concerned” with price inflation. And 24% are “somewhat concerned” about inflation. Only 13% are a “little concerned” or not concerned at all.  Three-quarters (76%) of those in households with incomes under $50,000 are “very concerned,” compared to 38% in households with incomes over $150,000.

“Consumers have started to feel the price increase in grocery stores and at the gas pump,” said Tuluca. “And people with smaller incomes will feel the increases first and hardest.” 

Tuluca also said that “while higher prices look like a trend toward inflation, there are signs that it might be a temporary imbalance in the global demand and supply for food stuff and oil.  Still, the consumer has reason to worry.”

At the same time that a quarter (27%) say their household income has increased in the past year, 69% say their income has stayed the same or declined. Again there is an income divide. A plurality of households making less than $100,000 say their income has stayed about the same in the past year, while a plurality of households making more than $100,000 report their income has increased in the past year.

Adding to some people’s worries is their home mortgage. About one in seven homeowners (14%) say they are underwater: Their mortgage is worth more than their house. 

About half (48%) think housing prices will rise in 2011, while 30% think they will decline.

“Every recession tends to take everyone down together,” said Tuluca, “but every recovery doesn’t take everyone up at the same time.”

Other findings of the study:

  • One in three workers (32%) are “somewhat worried” or “very worried” that they might lose their job this coming year.
  • 46% report that they could live off their savings for more than six months if they were to lose their jobs -- a decline from 51% a year ago.

The telephone survey of 610 randomly selected adults throughout New Jersey who participate in their household’s financial decisions is sponsored by the Silberman College of Business at Fairleigh Dickinson University, and was conducted by Fairleigh Dickinson University’s PublicMind from March 29 through April 4, 2011, and has a margin of error of +/- 4% percentage points.