Table of Contents
Executive Summary
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- Is consumer deleveraging finally ending?
- GDP and consumer spending
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- Figure 1: Real Personal Consumption Expenditures, Jan. 1, 2000-Nov. 1, 2013
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- Figure 2: PCE – Contribution to GDP growth, Jan. 1, 2000-Nov. 1, 2013
- Figure 3: Real Personal Income (excluding current transfer receipts), Jan. 1, 2000-Nov. 1, 2013
- Household financial health overall hasn’t changed much in the last year…
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- Figure 4: Current household financial situation, overall, December 2013 and December 2012
- …except for higher income households
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- Figure 5: Current household financial situation, by household income ($150K+), December 2013
- Consumers aren’t saving enough – but they are not necessarily concerned about it
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- Figure 6: Amount in retirement and general savings, by household income, December 2013
- Figure 7: Amount in retirement and general savings, by age, December 2013
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- Figure 8: Attitudes toward personal finances, by household income, December 2013
- Even the highest income households are carrying balances on credit cards
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- Figure 9: Credit card ownership and payment behavior, by household income, December 2013
- Consumers are more hopeful for the housing market than last year
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- Figure 10: Attitudes toward own household situation and overall economy, December 2013
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- Figure 11: Expectations for household and U.S. economic situation in next 12 months, December 2012
- Other highlights
- Black consumers continue to be optimistic
- Innovations and innovators
- What we think
Issues and Insights
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- Figure 12: Amount in retirement and general savings, by age, December 2013
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- Figure 13: Attitudes toward personal finances, by gender and age, December 2013
- Insights
- Issue: optimism about the economy
- Insights:
- Issue: Higher income households are not as financially healthy as they could be
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- Figure 14: Current household financial situation, by household income, December 2013
- Figure 15: Amount in retirement and general savings, by household income, December 2013
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- Figure 16: Credit card ownership and payment behavior, by household income, December 2013
- Figure 17: Household loans, by household income, December 2013
- Insights:
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Trend Application
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- Inspire trend: Immaterial World
- Inspire trend: Patriot Games
- Mintel futures trend: Generation Next
Current Economic Environment
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- Key points
- GDP above pre-recessionary levels
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- Figure 18: Real Gross Domestic Product, billions of chained 2005 dollars, Jan. 1, 2000 - Sept. 1, 2013
- Figure 19: US GDP quarterly growth rate, Q1 2008 - Q3 2013
- Consumer spending and GDP growth
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- Figure 20: Real Personal Consumption Expenditures, Jan. 1, 2000 - Nov. 1, 2013
- Figure 21: Real PCE as a percentage of GDP, 1947-2012
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- Figure 22: PCE – contribution to percent change in real GDP, Jan. 1, 2000 - Oct. 1, 2013
- The US consumer and the global economy
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- Figure 23: US GDP as a percentage of World GDP/PPP, 2002-12
- Figure 24: Real imports of goods and services, Jan. 1, 1980 - July 1, 2013
- Recovery in the housing market should help investment
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- Figure 25: Real private residential fixed investment, billions of chained 2009 dollars, Jan. 1, 2000 - Oct. 1, 2013
- Figure 26: Real private non-residential fixed investment, billions of chained 2009 dollars, Jan. 1, 2000 - July 1, 2013
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- Figure 27: Real government consumption expenditures and gross investment, Jan. 1, 1995 - Oct. 1, 2013
- The impact of a slower rate of growth in consumption
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- Figure 28: Real retail and foodservice sales, Jan. 1, 2000 - Jan. 1, 2014
Indications for Future Consumer Spending
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- Key points
- Impact of the “Great Recession” on household net worth
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- Figure 29: Total net worth of households and non-profit organizations, Jan. 1, 2000 - July 1, 2013
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- Figure 30: Household net worth as a percentage of DPI, Jan. 1 1953 - July 1, 2013
- Total real wages now have surpassed 2008 levels
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- Figure 31: Real Personal Income (excluding current transfer receipts), Jan. 1, 2000 - Nov. 1, 2013
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- Figure 32: Productivity (output) per person, nonfarm business sector, Jan. 1, 2000 – July 1, 2013
- Low interest rates and the wealth effect
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- Figure 33: 30-year fixed rate mortgage average, Jan. 5, 2006 – Feb. 2, 2014
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- Figure 34: Consumer credit outstanding, total, revolving and non-revolving, Jan. 1, 2000 – Dec. 1, 2013
- Household debt burden – positive indicators
- Disposable personal income has increased –
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- Figure 35: Disposable Personal Income, Jan. 1, 2000 – Dec. 1, 2013
- Household debt service ratios have fallen
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- Figure 36: Household debt service payments as a percentage of DPI, Jan. 1, 1980 – July 1, 2013
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- Figure 37: Total household financial obligations as a percent of Disposable Personal Income, Jan. 1, 1980-July 1, 2013
- Other indicators – consumer sentiment
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- Figure 38: University of Michigan Consumer Sentiment index, Jan. 1, 2000 – Dec. 1, 2013
- Savings rate reflects a focus on saving rather than spending
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- Figure 39: Personal savings rate, Jan. 1, 2000 – Dec. 1, 2013
- Stabilization in the housing market
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- Figure 40: S&P Case Shiller 20-city home price index, Jan. 1, 2000 – Nov. 1, 2013
- Inflation is steady
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- Figure 41: Consumer price index, all urban consumers – all items, Jan. 1, 2000 – Nov. 1, 2013
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- Figure 42: Consumer price index, all urban consumers – medical care, Jan. 1, 2000 – Nov. 1, 2013
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- Figure 43: Consumer price index, all urban consumers – tuition, other school fees and child care, Jan. 1, 2000 – Nov. 1, 2013
- Gasoline prices may cause concern
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- Figure 44: Weekly US Retail gasoline prices (dollars per gallon), all grades and formulations, 4/5/1993 – 1/3/2014
- The supply side – credit availability
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- Figure 45: Survey of bank lending officers – net percentage of domestic banks tightening standards on consumer loans, credit cards, 1/1/2000-10/1/2013
Marketing Strategies
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- Key points
- A resurgence in bonus-based marketing
- The price war moves from new cards to balance transfer deals…
- …and to checking accounts
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- Figure 46: Wells Fargo direct mail ad, December 2013
- Source Bank offers $150 to new customers
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- Figure 47: Source Bank direct mail ad, December 2013
- Regions Bank using cash bonuses to encourage regular saving
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- Figure 48: Regions Bank direct mail ad, December 2013
- Using bonuses to compensate for low interest rates
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- Figure 49: Chase direct mail ad, December 2013
- $200 for opening a checking account with Citadel Bank
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- Figure 50: Citadel Bank direct mail ad, December 2013
- First State Bank appeals to a sense of nostalgia
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- Figure 51: First State Bank direct mail ad, December 2013
- Discover goes back to rewarding financial activity
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- Figure 52: Discover direct mail ad, December 2013
- Citibank is making heavy use of bonuses and other incentives
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- Figure 53: Citibank direct mail ad, December 2013
- Figure 54: Citi direct mail ad, December 2013
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- Figure 55: Citi Simplicity direct mail ad, December 2013
- Companies are also offering bonuses to new investment customers
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- Figure 56: Capital One 360 direct mail ad, December 2013
- Vanguard is supporting women
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- Figure 57: Vanguard direct mail ad, December 2013
- Key Investment Services aims to help Gen Xers plan for the future
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- Figure 58: Key Investment Services direct mail ad, December 2013
- Targeted savings ads for college saving funds
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- Figure 59: New York State 529 college savings direct mail ad, December 2013
Consumers and Household Financial Health
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- Key points
- Most consumers say their finances are “healthy” or “OK”
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- Figure 60: Current household financial situation, overall, Dec. 2013 and Dec. 2012
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- Figure 61: Current household financial situation, by age, December 2013
- Men of all ages feel more secure than their female counterparts
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- Figure 62: Current household financial situation, by gender and age, December 2013
- Even higher earners are not immune from financial stress
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- Figure 63: Current household financial situation, by household income, December 2013
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- Figure 64: Current economic situation of household, by household income, December 2012
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- Figure 65: Current household financial situation, by race/Hispanic origin, December 2013
- Economic prosperity is about personal circumstances, not region
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- Figure 66: Current household financial situation, by region, December 2013
- The advantages of age
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- Figure 67: Current household financial situation, by generations, December 2013
- Twitter users are more positive than most
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- Figure 68: Current household financial situation, by frequency of visiting social media website, December 2013
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- Figure 69: Current household financial situation, by frequency of visiting social media website, December 2013
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- Figure 70: Current household financial situation, by device ownership, December 2013
Consumers’ Financial Resources
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- Key points
- Less than half of consumers have $1,000 in emergency savings
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- Figure 71: Amount in retirement and general savings, by gender, December 2013
- Only half of over-65s have $100k+ in investible assets
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- Figure 72: Amount in retirement and general savings, by age, December 2013
- Younger women are much more likely to be financially vulnerable
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- Figure 73: Amount in retirement and general savings, by gender and age, December 2013
- Savings linked to income – but some high earners are still not saving
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- Figure 74: Amount in retirement and general savings, by household income, December 2013
- A strong racial divide in asset ownership
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- Figure 75: Amount in retirement and general savings, by race/Hispanic origin, December 2013
- Responses hint at the cost of living alone
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- Figure 76: Amount in retirement and general savings, by marital/relationship status, December 2013
- Little regional variation in savings rates
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- Figure 77: Amount in retirement and general savings, by region, December 2013
- Reaping the rewards of a graduate degree
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- Figure 78: Amount in retirement and general savings, by education, December 2013
- The link between financial security and savings
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- Figure 79: Amount in retirement and general savings, by current household financial situation, December 2013
Consumer Borrowing Behavior
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- Key points
- About a quarter of consumers carry a credit card balance
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- Figure 80: Credit card ownership and payment behavior, by gender, December 2013
- 25-54-year-olds most likely to carry a high balance on their card
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- Figure 81: Credit card ownership and payment behavior, by age, December 2013
- Many higher earners still carry a credit card balance
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- Figure 82: Credit card ownership and payment behavior, by household income, December 2013
- Blacks credit card holders most likely to carry a balance
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- Figure 83: Credit card ownership and payment behavior, by race/Hispanic origin, December 2013
- A strong link between education and card usage
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- Figure 84: Credit card ownership and payment behavior, by education, December 2013
- Some over-extended consumers struggling to clear their card balances
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- Figure 85: Credit card ownership and payment behavior, by current household financial situation, December 2013
- Young people are the most likely to be delinquent on loans
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- Figure 86: Household loans, by gender, December 2013
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- Figure 87: Household loans, by age, December 2013
- More proof that some higher earners are also facing financial strain
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- Figure 88: Household loans, by household income, December 2013
- Hispanics are more likely than most to be behind on loan payments
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- Figure 89: Household loans, by race/Hispanic origin, December 2013
- Affluent women most likely to be managing their finances responsibly
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- Figure 90: Household loans, by gender and household income, December 2013
Spending Behavior
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- Key points
- Eight in 10 claim to be able to manage their spending well
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- Figure 91: Attitudes toward spending behavior, by gender and age, December 2013
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- Figure 92: Attitudes toward spending behavior, by generations, December 2013
- A danger of complacency among younger high earners
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- Figure 93: Attitudes toward spending behavior, by age and household income, December 2013
- Reckless spending is having an impact on borrowing levels
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- Figure 94: Attitudes toward spending behavior, by credit cardholders – Revolvers and transactors, December 2013
- Is reckless spending a cause of financial stress, or a result?
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- Figure 95: Attitudes toward pending behavior, by household loans, December 2013
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- Figure 96: Attitudes toward spending behavior, by retirement and savings, December 2013
- Reasons for overspending
- Emergencies and insufficient income are main reasons for overspending
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- Figure 97: Reasons for overspending, by gender, December 2013
- Even high earners can be caught out by unexpected expenses
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- Figure 98: Reasons for overspending, by household income, December 2013
Financial and Economic Expectations
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- Key points
- Consumers are more optimistic about themselves than about the overall economy
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- Figure 99: Attitudes toward own household situation and overall economy, December 2013
- US consumers aren’t convinced that the feel-good factor is returning
- The optimism of youth
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- Figure 100: Attitudes toward own household situation and overall economy – net balance of expectations, by gender and age, December 2013
- Further signs of an uneven recovery
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- Figure 101: Attitudes toward own household situation and overall economy – net balance of expectations, December 2013
- Black people are much more optimistic about the coming year
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- Figure 102: Attitudes toward own household situation and overall economy – net balance of expectations, by race/Hispanic origin, December 2013
- A strong North/South split
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- Figure 103: Attitudes toward own household situation and overall economy – net balance of expectations, by region, December 2013
- Male higher earners are particularly optimistic
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- Figure 104: Attitudes toward own household situation and overall economy – net balance of expectations, by gender and household income, December 2013
Household Financial Priorities
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- Key points
- Staying on top of bills and paying down debt are main financial priorities
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- Figure 105: Household financial priorities in next 12 months, any important by gender, December 2013
- Clearing credit cards is key to all age groups
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- Figure 106: Household financial priorities in next 12 months, any important by age, December 2013
- Women are focusing on day-to-day budgeting
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- Figure 107: Household financial priorities in next 12 months, any important by gender and age, December 2013
- Saving for the long term is a luxury only open to some
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- Figure 108: Household financial priorities in next 12 months, any important by household income, December 2013
- Blacks and Hispanics are looking to pay down their mortgages
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- Figure 109: Household financial priorities in next 12 months, any important by race/Hispanic origin, December 2013
- The Swing Generation are less interested in building savings
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- Figure 110: Household financial priorities in next 12 months, any important by generations, December 2013
- Lower earners are working hard to make sure bills are paid
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- Figure 111: Household financial priorities in next 12 months, any important by gender and household income, December 2013
- Older respondents happy to spend on themselves
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- Figure 112: Household financial priorities in next 12 months, any important by age and household income, December 2013
Financial Goals for Homeowners
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- Key points
- Youngest homeowners are most likely to fix up their homes
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- Figure 113: Homeowner goals, by age, December 2013
- Three in 10 of the highest earners plan to make a major investment in their home
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- Figure 114: Homeowner goals, by household income, December 2013
- Higher level of housing activity among Blacks and Hispanics
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- Figure 115: Homeowner goals, by race/Hispanic origin, December 2013
- Higher spending planned in the West
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- Figure 116: Homeowner goals, by region, December 2013
- Higher earners are looking to improve their home
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- Figure 117: Homeowner goals, by age and household income, December 2013
- 11% of the financially healthy want to buy a second home
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- Figure 118: Homeowner goals, by current household financial situation, December 2013
Attitudes toward the Economy and Economic Success
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- Key points
- Respondents less optimistic about the US and its future place in the world
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- Figure 119: Attitudes toward the US and the US economy, December 2013
- Do younger people still believe in the American Dream?
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- Figure 120: Agreement with attitudes toward the US and the US economy, by gender and age, December 2013
- Higher earners have greater faith in the old certainties
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- Figure 121: Agreement with attitudes toward the US and the US economy, by household income, December 2013
- Blacks and Hispanics have greater faith in the impact of government intervention
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- Figure 122: Agreement with attitudes toward the US and the US economy, by race/Hispanic origin, December 2013
Attitudes toward Personal Finances
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- Key points
- Young people, men in particular, seem delusional about finances
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- Figure 123: Attitudes toward personal finances, by gender and age, December 2013
- Retirement planning is a luxury only higher earners can afford
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- Figure 124: Attitudes toward personal finances, by household income, December 2013
- Healthcare and insurance costs worrying Boomers
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- Figure 125: Attitudes toward personal finances, by generations, December 2013
- Graduates are trying to make plans for retirement
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- Figure 126: Attitudes toward personal finances, by education, December 2013
- Even the financially healthy are rethinking their spending habits
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- Figure 127: Attitudes toward personal finances, by current household financial situation, December 2013
Political Affiliation and Attitudes toward the Economy
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- Key points
- One third identify themselves as Democrats
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- Figure 128: Political affiliation, by gender, December 2013
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- Figure 129: Political affiliation, by age, December 2013
- Older people more likely to say they vote Republican
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- Figure 130: Political affiliation, by gender and age, December 2013
- Figure 131: Political affiliation, by generations, December 2013
- A pronounced income split…
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- Figure 132: Political affiliation, by household income, December 2013
- …and a clear divide across racial and ethnic groups
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- Figure 133: Political affiliation, by race/Hispanic origin, December 2013
- People who are struggling tend to favor Democrats
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- Figure 134: Political affiliation, by current household financial situation, December 2013
- People who expect their incomes to rise more likely to vote Democrat…
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- Figure 135: Political affiliation, by attitudes toward own household situation and overall economy – Your household’s income, December 2013
- …as are those who expect unemployment to fall
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- Figure 136: Political affiliation, by attitudes toward own household situation and overall economy – U. S. unemployment rate, December 2013
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- Figure 137: Political affiliation, by attitudes toward own household situation and overall economy – US taxes, December 2013
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- Figure 138: Political affiliation, by attitudes toward own household situation and overall economy – US inflation, December 2013
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- Figure 139: Political affiliation, by attitudes toward own household situation and overall economy – US economic growth, December 2013
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- Figure 140: Political affiliation, by attitudes toward own household situation and overall economy – US stock prices, December 2013
- Democrats tend to have a more positive view of the US’s economy
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- Figure 141: Political affiliation, by agreement with attitudes toward the US and the US economy – Any agree, December 2013
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- Figure 142: Political affiliation, by agreement with attitudes toward the US and the US economy – Any agree, December 2013
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- Figure 143: Amount in retirement and general savings, by political affiliation, December 2013
Attitudes toward the Affordable Care Act
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- Key points
- Few people know much about ObamaCare
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- Figure 144: Attitudes toward the ACA and impact on the economy, by gender and age, December 2013
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- Figure 145: Attitudes toward the ACA and impact on the economy, by race/Hispanic origin, December 2013
- The Swing Generation is less forgiving on healthcare premiums
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- Figure 146: Attitudes toward the ACA and impact on the economy, by generations, December 2013
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