Summer is swiftly approaching and, with it, a yearly barometer of the public's confidence in both its nation's pocketbook and its own. Will the coming months persuade the public that past economic woes are truly past, or will American consumers remain cautious about their personal finances and the amounts they can safely spend in these uncertain times?
Hints that the Federal Reserve might soon raise interest rates have triggered a bumpy ride for the stock market over the last few weeks this despite a startling succession of positive earnings reports from many of the nation's major corporations.
I believe the post-2000 economy has fallen into a vicious cycle: The opinion of individuals about their personal economic well-being affects investors' sentiments, and in turn, the up-and-down behavior of the stock market and other broad-based economic news impacts those same Americans.
Given that, it seems a sound idea to see if the public's sentiment on its own personal economic welfare can provide some hope or at least clarity about the nation's economic health. A good way to measure that is to ask people how they feel about their own money situation and, more specifically, how much they plan to spend on summer travel this year.
Here are the results of two recent InsiderAdvantage surveys on these topics.
Question One: Currently, are your personal finances getting better, getting worse or staying about the same?
Better: 25 percent;
Worse: 21 percent;
Staying about the same: 53 percent;
Undecided/ No opinion: 1 percent.
Question Two: Do you intend to travel more, less or about the same as last summer?
More: 15 percent;
Less: 15 percent;
About the same: 69 percent;
No opinion/Don't know:1 percent.
The poll was conducted April 12 and April 14 among 500 Americans. It has a margin of error of plus or minus 4 percent.
So let's get this straight. Investors in the stock market seem split from day to day as to invest or not invest; average citizens seem closely divided as to whether their own finances have improved or not; and there is a complete dead-even split decision among Americans on whether they will live it up this summer by traveling more or play it more austere by staying home or vacationing nearby. All of this constitutes a pattern not just emerging but already becoming predictive.
Apparently, the recent improving economic news isn't enough to return public sentiment to where it was in the roaring 1990s. At the same time, the threats of interest-rate hikes and possible terrorism strikes at home, combined with the smoldering troubles in Iraq, haven't persuaded Americans to throw in the towel on economic recovery.
In fact, the most recent InsiderAdvantage survey showed respondents feeling better (by a few percentage points) about their own finances than they did a month earlier.
It's been a long time since we have seen public opinion so evenly divided on everything from the economy to the presidential race and even issues as personal as where and when to vacation.
But this much is for sure: Don't look for this even split on so many issues to become a permanent feature of the national landscape. Americans are known for having strong opinions on virtually any subject. Our times are rare in polling because they seem to lack a critical mass of opinion that might guide government and other leaders to make more definitive public policy.
Based on the raw data, it's hard to understand why Americans don't feel better about today's economy. New jobs are being created at a newly brisk rate, jobless claims have dropped, and Wall Street looks robust. Many economists believe that a reasonable adjustment in interest rates by the Fed would actually serve to sustain the economic recovery for a longer period of time.
All that aside, politicians and the investment community had best be on their collective toes. When this much relatively good economic news results only in a continued split opinion among the public on its own economic circumstances, anything can happen.
One is forced to wonder what miracle must take place to persuade most people that we live in prosperous times. And more ominously, what problem or event could send the public tumbling back to its more negative views of recent years?
I find it hard to believe that between now and November we won't see some sort of shift of these opinions, one way or the other.
Matt Towery is chair of InsiderAdvantage, which works in conjunction with The Marketing Workshop to conduct polls for his syndicated column. He is based in Jacksonville, Fla.
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