Concerned about debt and their jobs, a whopping 85 percent of U.S. consumers believe the country is currently in a recession and more than of a third listed the economy as their top concern over the next six months, a new online survey by The Nielsen Co. finds.

The survey also says U.S. consumer confidence in the economy plunged 17 points from the second half of 2007 to the first half of 2008.

While government officials are hoping the tax rebate checks sent out this spring will stimulate the economy, the consumers in the survey said they were planning to use the money toward debt rather than shopping.

In fact, 69 percent of U.S. consumers believe the next 12 months are either a “bad” or “not so good” time to buy things they want or need. Once they've covered essential living expenses, 41 percent reported that they use spare cash to pay off debt, credit cards, or loans. More than a third (36 percent) say they are putting extra funds into savings. Nearly a quarter (24 percent) of consumers say they do not have any spare cash.

According to Nielsen's research, just 21 percent are using extra money for home improvements/decorating, while 19 percent are opting to plunk down money on out-of-home entertainment or holidays and vacations. Shopping sprees rank low on their list of priorities, with 17 percent buying new clothes and 10 percent splurging on new technology. Some 11 percent planned to put extra money into a retirement fund, while nine percent reported that they would invest in shares of stock/mutual funds.

“These findings are really telling in that consumers are clearly feeling gun-shy when it comes to spending or investing,” David Parma, The Nielsen Co.'s global head of customized research said in a release issued Thursday. “While it's definitely a good move for consumers to pay off their personal debt, it will likely do little to jumpstart the economy.”

While 35 percent of U.S. consumers reported that they consider the economy their biggest concern over the next six months, debt came in a distant second place at 15 percent, followed by the ability to find work/life balance, which was a concern for eight percent of those surveyed. International affairs, such as war and terrorism, were among the least of the concerns of those surveyed, with just two percent and three percent, respectively, citing those areas. Although it's a hot-button political issue, immigration was cited as a concern by two percent of respondents.

“With high gas prices, food inflation and other economic pressures, it's not a surprise that the economy is a top concern for many Americans,” Parma said. “Consumers have many reasons to feel pessimistic right now and even if we're not officially in a recession, consumers certainly feel like we're in one.”

Overall, Americans' view of the economy is bleak, the survey finds. Sixty-six percent of U.S. respondents have a pessimistic view of their local job prospects over the next 12 months, with 50 percent saying it's “not so good,” and 16 percent calling it “downright bad.” Just three percent consider their local job market potential to be “excellent,” the survey found.

Despite their negative views of the U.S. economy, most Americans' views of their own financial affairs are good. More than half (51 percent) of those surveyed described their personal finance situation as “excellent” or “good,” while 36 percent, ranked their situation as “not so good.” Most of the U.S. consumers surveyed said they are not convinced the world will enter a global recession within the next year.

Specifically: 38 percent say they don't believe a worldwide recession will take place, while 46 percent said they don't know. Just 15 percent say a global recession is definitely on the horizon.

Should the economy take a turn for the worse, inflation tops U.S. consumers' concerns (62 percent), followed by unemployment (50 percent), falling property prices (25 percent), and interest rate increases (21 percent), the survey finds.

The Nielsen Global Online Consumer Confidence and Opinion Survey was conducted by Nielsen Customized Research in April 2008 among 28,153 Internet users, including 1,000 U.S. consumers in 51 markets from Europe, Asia Pacific, North America and the Middle East. The largest half-yearly survey of its kind, the survey is designed to provide insight into current confidence levels, spending habits/intentions and the major concerns of consumers across the globe.

The Nielsen Co. is the parent of National Jeweler.

Source: Nationaljeweler.com
www.nationaljeweler.com