• by Jack Loechner , Staff Writer @mp_research, September 8, 2011

A new nationwide survey by Citibank, conducted by Hart Research Associates, finds a decline in consumers' expectations for the economy, even though their assessment of current economic conditions are virtually unchanged since the start of 2011. As of August, 72% of consumers believe the economy still has a way to go to reach bottom and 44% feel less financially secure now than they did in 2008. A silver lining is that 60% of Americans remain somewhat or very optimistic about their own personal economic situation over the next 12 months, while 36% are somewhat or very pessimistic.

The survey found that at the start of 2011, 63% of Americans believed that local business conditions would be improving by the end of the year, but now, with the year more than half over, only a 41% expect improvement within the next 12 months.

Michelle Peluso, Global Consumer Chief Marketing and Internet Officer, Citi says, "... these survey results bring into sharp relief the degree to which the confidence of even the most optimistic consumers has been shaken by a tumultuous summer... "

Among the survey's key findings:

• 41% of American consumers expect business conditions to improve in their local area over the next 12 months. This represents a 22 point decline since January 2011, and a 10 point decline since April.
• 23% rate their local economy as excellent or good, while 77% rate their local economy as either only fair or poor, nearly identical to levels in January
• 72% of American consumers believe the economic downturn still has a way to go before reaching bottom. This represents a 13 percentage point increase since the start of 2011.
• 13% of Americans rate employment opportunities in their area as excellent or good; 85% rate employment opportunities as only fair or poor in their area, relatively unchanged from previous surveys this year.
• Comfort with current level of savings and debt remain mostly unchanged, 46% and 61% respectively.

Three years after the downturn began, the survey reveals 44% of Americans feel less financially secure now than they did at the start of the economic downturn in 2008. Only 10% of consumers reported feeling more financially secure, while 45% reported feeling about the same.

As consumers continue to weather the downturn, the survey found that the top factors cited for financial security today are:

• Staying healthy (45%)
• Having a secure job (41%)
• Avoiding debt (32%)
• Having an emergency fund (17%)
• Owning your own home (16%)
• Having a college degree (15%)

When it comes to staying financially secure in today's economy, nearly a third 32% of Americans believe that being their own boss is best. Working for a large corporation (24%) and the federal government (21%) are also viewed as safer employment options than working for a small business (17%) or for a state or local government (15%).

When it comes to saving and spending, Americans are increasingly concerned about paying for necessities like food and gasoline, with significant proportions of Americans making deep and permanent changes to the way they save and spend:

• 41% are worried about the amount they pay for necessities like food and gasoline, up 18 points from September 2010
• 28% are concerned about the cost of health care
• 21% are concerned about the security of their retirement accounts

Americans are not just trimming the fat from their personal finances, but making deep cuts:

• 30% have changed living arrangements in order to save money
• 24% are doing jobs now that they would not have chosen in a better economy
• 24% have decided to postpone retirement

Americans are also becoming savvier consumers:

• 72% are using coupons they receive in the mail, newspapers or magazines
• 62% are cutting back on premium products like coffee and food in favor of less expensive options
• 44% are shopping more at bulk food stores
• 36% are using online special offers

Peter D. Hart, who conducted the survey, says "... after a summer filled with debt negotiations and a credit rating downgrade, we spoke with Americans when the stock market was particularly volatile. All of this has clearly taken a toll on consumer confidence... "

For additional information from Citi, please visit here.