By Jon Cohen and Jennifer Agiesta
Washington Post Staff Writers
Wednesday, February 25, 2009 5:00 PM
A new Washington Post-ABC News poll shows Americans' feelings of financial insecurity have risen significantly since mid-September, as fears about making mortgage payments have spread and more now see the economy as in a long-term, serious decline.
Two-thirds of those polled said they've cut back on their spending, including nearly a third who have pulled back "sharply." Americans across income groups said they are opening their wallets less often these days, with those with lower family incomes more likely to say they've sharply slashed their spending. One-third said someone in their household has lost a job or had their pay or hours cut in recent months.
Also contributing to the new spate of penny-pinching are widespread concerns about how much longer the recession will last. Overall, 70 percent of Americans anticipate a downturn lasting well into 2010 or longer; more than a third see it lasting two or more years. Those who see an extended recession are more likely to say they've pared back their typical buying habits.
The number who said they're hunkered down for a lengthy recession exceeds that in polls during other recent recessions. Fewer than half are optimistic about the economy's prospects in the coming year and 56 percent now see the downturn as an indication of a deep, long-term slide, not a normal twist in the business cycle. That's a number on par with that from October 1992, a month before broad concerns about the nation's economy propelled Bill Clinton into the presidency.
Those concerns have not shaken people's optimism about their personal finances --66 percent are hopeful about the year ahead on this score -- but perceptions about current conditions have clearly soured, and there's deep anxiety about what might happen over the next few months.
Nearly six in 10, 57 percent, said the current economic situation is a cause of stress in their lives, including more than a quarter who label that anxiety "serious." Overall, about two-thirds said the recession has hit home, with job losses and pay cuts reaching far and wide: three-quarters of respondents said a close friend, immediate family member or someone in their household has been impacted.
More than half of all workers are concerned they or another employed member of their household will see hours or pay cuts in the next few months; nearly half worry about job loss. Among those in households that have already experienced such a setback, 82 percent fear further cuts in pay or hours or the loss of a job.
As debate rages over President Obama's housing plan, concern about having enough money to afford housing payments has climbed to 46 percent, with nearly all of the increase among homeowners (most renters, who tend to have lower incomes, were already worried). About one in five homeowners expressed grave concern about being able to afford his or her payments, up from one in seven late last year.
Overall financial insecurity has jumped higher since just before the stock market slide in mid-September: 43 percent said they feel very or somewhat insecure, and for the first time in Post-ABC polls, more said they feel "very insecure" than "very secure." Here, it's the higher income households that have shifted the most: The percentage of those with family incomes of $100,000 or more who said they feel financially secure plummeted nearly 20 points from Labor Day to now, with the number feeling "very secure" just about cut in half.
As they have since the outset of the financial crisis, Americans divide about evenly on confidence in their nest-eggs: 48 percent are confident they'll have enough income and assets to last the rest of their lives, 48 percent are not so or not at all confident.
This Washington Post-ABC News poll was conducted by landline and cellphone Feb. 19-22 among a random national sample of 1,001 adults. Results from the full poll have an error margin of plus or minus three percentage points; error margins are larger for subgroups.