Recession Is Here, Local Residents Say

FAYETTEVILLE, Ark. – While leading economists continue to debate the issue, a solid majority – 73.5 percent – of Northwest Arkansans think the U.S. economy is now in a recession. Almost half – 47.3 percent – of local residents say they are worse off financially than they were a year ago, and only 22 percent expect to be better off financially a year from now. These and other findings from the Northwest Arkansas Omnibus Survey were released today.

“When the answers to all questions are considered together, it is apparent that in the United States as a whole and in Northwest Arkansas, people are decidedly more pessimistic about the economy than they were from 2005 through 2007,” said Molly Longstreth, director of the Survey Research Center at the University of Arkansas. “For example, a May 2008 Gallup Poll showed that a large percentage of Americans – 55 percent – feel they are worse off financially now than they were a year ago. According to one analyst, this is the first time in Gallup’s 32-year history of asking the question that more than half of Americans gave this pessimistic assessment.”

The local survey, conducted by the Survey Research Center, includes questions from the Index of Consumer Sentiment, a national poll that measures consumer attitudes about current and future economic conditions. The index is a standard by which economists, investors and policymakers predict future economic conditions, because they know consumer spending accounts for approximately two-thirds of U.S. economic activity.

Local attitudes about the economy would predict more limited spending. For example, only 26 percent of Northwest Arkansas residents think now is a good time to buy a major household item. Almost three-fourths of local residents think that now is a bad time to buy a major household item or are uncertain because they see the current period as both good and bad financially.

The most dramatic survey results, however, pertained to attitudes about residents’ current financial condition and their predictions for the future. In contrast to the large percent of Northwest Arkansans who said they are worse off financially than they were a year ago, only a minority (21.9 percent) of residents believe they and their families are better off financially today than they were one year ago. Slightly more than 30 percent of local residents contend they are about the same financially as they were a year ago.

Looking to the future, 45.5 percent of Northwest Arkansans estimate that next year they will be the same financially as they are today. Almost 30 percent think they will be worse off next year, compared to 25 percent who think their financial condition will improve. 

“Local residents are even more pessimistic about the long-term health of the U.S. economy,” Longstreth said. “More than half – 57.4 percent – asserted that the country as a whole will have continuous bad times over the next five years. Only 22 percent foresee good financial times for the national economy over the next five years. The remaining 20.6 percent were uncertain. I think this clearly indicates that local residents have some anxieties about the economy.”

Conducted in both English and Spanish, the Northwest Arkansas Omnibus Survey uses random-digit dialing to contact a wide sample of residents. More than 600 residents of Benton, Carroll, Madison and Washington counties responded to the spring 2008 survey. With each omnibus survey, data are collected via a sophisticated, state-of-the-art, computer-assisted telephone interviewing system. Interviewers are highly trained, and information received during the process remains confidential. Findings are accurate within a range of 4 percentage points.

Established in 1998, the University of Arkansas Survey Research Center conducts surveys and evaluations for a variety of organizations and is dedicated to providing high-quality, nonbiased information. For more information on the center and its research, go to http://survey.uark.edu/.