Twenty-five percent say they are better off financially, a figure up seven percentage points.
While surveyors found improvement over last year in every income bracket, only in the highest bracket do those who say they are better off outweigh those who say they're worse off.
Two in five (40 percent) of those with household incomes over $150,000 say they're better off, while just one in four (26 percent in that income bracket say they're worse off.In the lowest bracket, earning under $50,000 a year, 23 percent say they're better off financially than a year ago, a gain of 8 percentage points, while more than half, 55 percent, say they're worse off, a decline of seven points from a year ago.
"It's the norm that those with the most income emerge from a recession first and most everyone trails them," Sorin Tuluca, professor of finance at the Silberman College of Business, said.
While fewer New Jerseyans say they're worse off and more say they are better off, their optimism is consistent: 46 percent say their financial well-being in the next 12 months will improve, compared to just 27 percent who think they will be worse off by year's end.
In the survey a year ago, 48 percent thought that they would be better off by the start of 2011 and 23 percent thought that they would be worse off. The reality, though, was that at the end of 2010 only 25 percent claimed to be better off while 48 percent were worse off.
"A year ago New Jerseyans were quite optimistic as they had the feeling that the worst was over," Tuluca said. "The reality is that the worst is over but the road ahead will continue to be a steep climb."
Similarly, while 25 percent say business conditions in the state have improved since a year ago, which is an increase of 12 points over a year ago. And while 56 percent say business conditions are worse, that is an improvement from 71 percent a year ago.
Looking to the future, New Jerseyans are bullish about prospects for business in the state: 54 percent say that business conditions will improve during the year while 26 percent, say business will be worse off. But reflecting a stubborn unemployment percentage at the national and state level, 65 percent of New Jerseyans still report that either they or someone in their family or a friend has lost their job, essentially unchanged from 67 percent a year ago.
"Unemployment certainly leaves a scar when it's you or a friend," Tuluca said, "yet as a statistic it lags behind other indicators. Even a little improvement in unemployment is good news. The upward trend is just not as quick as we would like, and many jobs will never come back."
Other notable results of the survey:
- 30 percent continue to be "somewhat worried" or "very worried" that they might lose their job this coming year.
- 35 percent say it is "somewhat" or "very difficult" to make payments on their credit cards, up from 33 percent a year ago, 31 percent two years ago, and 25 percent three years ago.
- Given a windfall of $1,000, 36 percent would save it, 12 percent would spend it, 45 percent would pay their bills and 4 percent would give it to charity. A majority (56 percent) of those making less than $50,000 would use it to pay bills. A majority (51 percent) of those making over $150,000 would save it.
- 49 percent think housing prices will rise in 2011, a decline from 56 percent a year ago, while 30 percent say prices will decline further, up from 26 percent last year.
What New Jerseyans say they will purchase this year has not increased over last year, and in many cases suggests a decrease. However, over the past year consumers tended to over-perform, that is, they spent more than they said they would.
"All things considered, people are uncertain, and uncertainty leads to caution," Tuluca said. "Consumers were cautious last year, but found themselves in some cases a little more secure, a little less worried about losing their jobs, and purchasing more."
The composite Index of New Jersey Consumer Intentions – what New Jerseyans think they will do on a theoretical scale of 0 to 100 – is 39, down from 42 a year ago and unchanged from 2009. The composite Index of New Jersey Consumer Performance – what consumers actually did in the past year – is 31, up from 28 a year ago and 24 the previous year, but well below its high of 43 in 2005.
"Consumers hope that all this is going to be over quickly," Tuluca said. "Unfortunately that won't be the case. The economy will take a while to heal."
The telephone survey of 809 randomly selected adults throughout New Jersey who participate in their household's financial decisions was conducted by PublicMind from Jan. 3 through Jan. 9 and has a margin of error of plus or minus 3.5 percentage points.
– TOM HESTER SR., NEWJERSEYNEWSROOM.COM