Five years after the collapse of Lehman Bros.—ground zero for the Great Recession—many Americans say things haven’t got much better. Yet we’ve clearly come a long way from the dark days that led to massive bailouts and soaring bankruptcies.
The stock market and home values have rebounded enough to boost Americans’ wealth by $16 trillion—the amount lost in the meltdown. The job market is recovering too.
But not all Americans are benefitting from the recovery, which began in 2009. According to a Country Financial survey:
- Half of Americans feel less secure financially than they did five years ago and one in five feel about the same. Just 27% feel more financially secure.
- Half of Americans feel the economy is worse than five years ago and one in five believe it is about the same. Just one in three believe the economy has improved.
- The sting felt most sharply is the depletion of savings. Millions were forced to spend their savings in the downturn and did not have the assets in place to benefit from the market recovery. Most often cited as a lasting effect of the downturn: reduced retirement nest egg and exhausted emergency fund. Fewer than 10% cite lost home equity.
These sobering readings put a different spin on feel-good news about the recovery. Investor confidence has returned. Fidelity found that four in five clients who trade stocks regularly believe the market will be even or higher the rest of this year. But the Country Financial poll highlights how few Americans believe they will share in that expected bounty: Nearly half say they are still recovering from the recession and one in five say they will never recover. Four in five either don’t know or expect another recession in the next five years.
The most hopeful are Millennials, a generation that endured a difficult job market but also had few assets to lose in the downturn. As a group, young people seem to have taken the recession’s lessons to heart. In a survey of college freshmen with a credit card, C&R Research found that:
- 69% pay their balance in full each month.
- Less than 2% exceed their credit limit or pay less than the minimum due.
- 60% have a formal budget for college expenses.
This is not the picture of spendthrift teens that we were so accustomed to seeing before the recession. Much has been made of the impact on Millennials, a generation larger than even the boomer generation and which will set the course of the economy for decades to come. They seem to be sticking with the concept of frugality and greater personal responsibility—and that might have something to do with why they are the most hopeful about their financial future.