NJ Consumers Not Optimistic About Economy

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STATE — New Jerseyans continue to be gloomy about their household finances. According to the most recent consumer survey by Fairleigh Dickinson University’s Silberman College of Business, just one in five New Jerseyans (21%) report they are better off than a year ago, and one in five (21%) say there has been no change, while the majority (56%) say they and their household are worse off.

Looking ahead, 41% think that they will be better off next year, down seven points from measurements in January, while 46% say their finances will not change or will worsen in the coming year. Another 13% are unsure.

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“That kind of pessimism makes consumers cautious, it makes them save, and it makes for a slow growing economy,” said Sorin Tuluca, professor of finance at FDU’s Silberman College of Business.

Indeed, New Jersey households are not planning to open their wallets soon, with just 7% saying they’ll let their credit balance increase in the coming months, and 37% saying making their card payments is somewhat or very difficult.

In addition, one in five consumers (19%) report that they have had to miss payment of their bills in the past six months. Those missed payments include mortgage, rent, home loans, credit cards and even utilities. While people under 30 years old are most likely to report missing a payment (39%), one in five between 30 and 59 years of age also report missing a payment, as well as one in ten people (9%) who are 60 and over.

“Obviously a persistently high unemployment rate is not good news for anyone, and that includes mortgage companies and banks,” said Tuluca. “More foreclosures and personal bankruptcies lead to a combination of unsold houses, low income and poor credit scores, which means a stagnant economy for everyone.”

On the brighter side, while 30% of those employed say they are somewhat or very worried about losing their job, that figure is down from April’s high of 36%. And, 69% say they are not worried about losing their job, up six points from April.

However, two-thirds (66%) report that they have either a relative or close friend who has lost a job, unchanged from January 2010. By contrast, in January of 2008, before large cracks opened in the economy, 61% reported they did not know anyone who had lost a job.

“Even though there are now more job offers, those jobs often require different qualifications than the skills that the recently unemployed have,” said Tuluca. “For them, little may change without a change in vocation and training.”

The telephone survey of 675 randomly selected adults throughout New Jersey who participate in their household’s financial decisions was sponsored by Fairleigh Dickinson University’s  Silberman College of Business and was conducted by FDU’s PublicMind from Oct. 4, 2010, through Oct. 10, 2010 and has a margin of error of +/-4 percentage points.


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