Economy has Californians saving more, spending less
By Darrell Smith
Published: Tuesday, Jul. 13, 2010 – 12:00 am | Page 6B
A new survey by lending giant Citi shows Californians remain uneasy about the economy and job growth; favor spending cuts over tax increases to close the state’s budget deficit; and are spending less and saving more.
Citi’s California Pulse quarterly survey of 1,200 residents released today asks Californians their remedies for curing the state’s budget crisis, and for their take on the state’s economy and California’s future.
Californians put little stock in today’s economy or job market – more than nine in 10 believe the state’s economy is just fair or poor, the survey reveals; 65 percent say the state is on the wrong track.
The results “demonstrate that Californians still see challenging conditions in the state,” said Rebecca Macieira-Kaufmann, president of Citibank California. She said Californians are changing their habits in response by saving more and reinvesting in their homes.
“They’re taking responsibility for their spending and making a decision to take action against the economy,” Macieira-Kaufmann said. “Their personal situation is still challenging.”
Younger Californians, those ages 18 to 34, say they are more optimistic that economic conditions will improve in the next 12 months. However, just 44 percent of Californians ages 44 to 55 thought better times were ahead.
Nearly 60 percent of all those who responded said the job market will brighten over the next year.
Cutting state spending was on Californians’ wish list – 54 percent said that was the better way to lift the state out of its budgetary mess rather than imposing tax hikes.
If respondents were in charge, they would cut spending rather than raise taxes – but would reject cuts to education, health care and public safety.
Tobacco and sodas were fair game, though, with 77 percent of respondents saying they would raise taxes on tobacco and 70 percent saying they would boost taxes on sugary soft drinks.
When it comes to their own lives, Californians appear to be holding onto their cash until the economy improves. The majority – 63 percent – are sitting out the summer travel season, traveling closer to home or spending less if they travel at all.
“Until consumers see more evidence in their everyday lives that conditions are improving, consumers will likely spend less and save more,” Macieira-Kaufmann said.
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