Jerseyans Less Pessimistic about Economy [AUDIO]

New Jerseyans are not overly optimistic about the economy and their financial well-being, but they are definitely less pessimistic. That’s the major take away from the latest quarterly consumer confidence survey by Fairleigh Dickinson University’s Silberman College of Business.

32% of New Jerseyans say that they are better off financially than they were last year, up seven points from a year ago, and the highest percentage measured since 2006,” says poll director Peter Woolley. “Two in five (41%) say they are worse off than a year ago, a seven-point decline from 48% in January of 2011, the lowest percentage measured since 2008.”

Woolley explains, “Going forward, half (47%) believe they will be better off financially in the upcoming year; unchanged from January 2011, but fewer (19%) say they will be worse off in 2012 than they were in January 2011, an eight-point improvement from the January 2011 results (27%).”

“The economy is definitely improving,” says Sorin Tuluca, professor of finance at the Silberman College of Business. “What’s interesting is that consumers realize that the economic improvement does not mean that we will go back to the economy of the past. They are more realistic in assessing their economic prospects.”

The perceptions of business conditions in the state also have improved over one year ago, where 30% now say business conditions are better, compared to only 25% in January 2011. Those who think that business conditions have gotten worse declined by 10 points; from 56% in 2011 to 46% in 2012. Looking at the year ahead, New Jerseyans continue to be optimistic, as 54% say business conditions will improve, unchanged from 2011 (54%). Those saying business conditions will be worse declined from 26% to 21%.

Unemployment continues to be a factor in the state, with 63% of New Jerseyans saying they, or someone close to them has lost a job in the past year, essentially unchanged from 2011 (65%). Also, despite the general sense of overall economic improvement, the percentage of New Jerseyans “somewhat” or “very” concerned about losing their job in the upcoming year remains steady at 32%.

“While still moving slowly, employment is picking up,” says Tuluca. “In the past quarter, unemployment dropped by about 1% and this is reflected in the survey.”

The survey also finds that 32% say it is “somewhat difficult” or “very difficult” to make payments on their credit card, down from 35% in 2011. 58% are “very” worried about inflation, Only 25% are confident the next generation will live better than us. Renters (36%) are more confident than homeowners (21%). Given a windfall of $1,000, a plurality (49%) would use it to pay bills, and 12% would spend it, both unchanged from 2011. However, this year only 30% would save it, down from 36% a year ago. Renters (61%) are more likely than home owners (44%) to use the money to pay bills.

On the housing front, often a leading indicator of recovery, only 46% think prices will increase in value in 2012. This continues the downward trend from 49% in January 2011 and 56% in January 2010. Homeowners (16%) are more likely than renters (6%) to say housing prices will be flat in the upcoming 12 months.

Tuluca says, “There are signs that the most important asset of many households, the house, has bottomed out in value. This explains people’s caution in spending, refinancing or otherwise using home equity as a piggybank. One hopes that the biggest lesson learned in this crises, is not to borrow more than you can repay against your home.”

The telephone survey of 660 randomly selected adults throughout New Jersey who participate in their household’s financial decisions was conducted from January 2 through January 8, 2012 and has a margin of error of +/- 4% percentage points.