Luth Research's IndicatorEDG survey finds Americans are less likely to feel their dreams are attainable. Back in the third quarter of 2006, 62% of Americans said they had an excellent, very good or good chance of achieving their personal dreams. Now 55% of Americans feel this way. On the flip side, 23% of Americans feel there is not a good chance or it is impossible for them to achieve their dreams – compared to 17% in Q3 2006.
Why so much dashing of dreams?
The Luth Research IndicatorEDG quarterly survey of 5000 Americans begun in Q3 2006 sheds considerable light on this. First of all, fewer Americans think their lives are better this year than last (36% now vs. 53% in Q3 2006.) It is the nature of Americans to be optimistic and the survey certainly finds this. But fewer Americans think life will be better a year from now compared to Q3 2006 –54% vs. 66%.
Is it the economy?
Yes and no. Clearly sellers of big ticket items need to be worried. Now, 62% of Americans do not expect to buy expensive items like computers and washing machines. This is up substantially from 45% in Q3 2006. Along the same lines, purchase intent for cars is now 10% vs. 13% in Q3 2006.
But, American optimism is certainly in evidence on the subject of the economy. Almost half (48%) feel the economy will be better in a year. This has been climbing steadily since the 32% recorded in the Q3 2006 benchmark, with a significant jump just following the 2008 presidential election.
Roseanne Luth, CEO of Luth Research says, "Today's economic realities are having a fundamental impact on the American consumer. As resilient as Americans have always been, people look for substantive, good news to boost optimism and justify spending."
Less hope, less happiness
Whether it is the economy or other factors, Americans' happiness has declined over the past three years. In Q3 2006, 75% of Americans said they were very happy (31%) or somewhat happy (44%.) Now 68% say they are very (25%) or somewhat (43%) happy.
This ebbing of happiness does not appear to have one core manifestation. In fact, there has been a consistent 3-4 percentage point drop in Americans' happiness with their communities, family life, work life, romantic life, residences and social life. The question is how long will it take for an improving economy to restore happiness to the levels we saw three years ago.
Who is happy?
- Women (71%) are happier than men (65%.) There is no politically correct interpretation here.
- The happiest demographic group identified is Americans with household incomes of $100,000+ - 81% of whom are very or somewhat happy. There is a historical threshold of income around $50,000 beyond which people are generally happy regardless of their incremental earning power. In more challenging times, a stronger relationship between money and happiness seems to be emerging.
Technology still rocks
One bright spot is that there are some really sizzling technology products. Between 60% and 70% of Americans think the following products are hot: digital cameras, car navigation systems, text messaging, DVRs, iPhones, iPods, and cell phones with video cameras. Some of these technologies are creating even more heat and some are waning in hotness.
Technology to watch: OLED TV – not hot yet, but building heat.
Luth notes, "Even in tough economic times, consumers will reward themselves. It used to be indulgent desserts, but now it is also the latest technology. The U.S. market is expected to see healthy yet fierce competition in consumer electronics in 2010."
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