The national economy posted employment growth for the 60th consecutive month in September, with the total gain in excess of 12 million jobs. Despite the growth, a new survey indicates that consumer sentiment about the economy and their finances has barely budged during the five-year period, according to the NRA’s Chief Economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.
The national economy continued to grow at a moderate pace in September, according to preliminary figures from the Bureau of Labor Statistics (BLS). The economy added a net 142,000 jobs in September on a seasonally-adjusted basis, which is slightly below the average employment gains posted during the first eight months of the year.
September was the 60th consecutive month of employment growth in the national economy, representing a total increase of more than 12 million jobs. However, despite the steady improvements that the economy has made since the depths of the Great Recession, consumers appear to have barely noticed.
According to a national survey* conducted last weekend by ORC International for the National Restaurant Association, eight in 10 adults described the current state of the national economy as either “fair” (42 percent) or “poor” (39 percent). Sixteen percent of consumers gave the economy a “good” rating, while only 2 percent said it is in “excellent” condition.
Sentiment has gradually trended in a positive direction since the early stages of the recovery in 2010, when more than nine in 10 consumers described the economy as either “fair” (34 percent) or “poor” (58 percent). However, it’s clear that from the perspective of consumers, the economy still has plenty of room for improvement.
While consumers' view of the overall economy remains rather bleak, their characterization of their personal economies isn't exactly brimming with confidence. When asked to rate the current state of their own personal finances, nearly two-thirds of adults described them as either “fair” (43 percent) or “poor” (21 percent). Fewer than one in 10 adults say their finances are currently in “excellent” condition.
Even more concerning is if we flash back five years – and 12 million jobs – the responses to the same question were almost identical. Nearly six in 10 adults said their personal finances were in “fair” (41 percent) or “poor” (18 percent) condition in 2010, while 7 percent described them as “excellent.”
With the personal economies of many households trending sideways, it’s not surprising that consumer spending has remained generally lackluster during the economy recovery. However, on the aggregate, households are in a much better position than they were in 2010. Debt burdens are lower, jobs are more plentiful, home values are rising, and low gas prices continue to leave a few extra dollars in their pocketbooks at the end of the month.
To be sure, as the economic fundamentals continue to improve, an increasing number of consumers will find themselves on a firmer footing – whether they realize it or not.
*The survey results are based on a nationally-representative telephone survey of 1,012 adults conducted September 24-27, 2015 for the National Restaurant Association by ORC International.