The majority of workers (58%) and retirees (60%) believe that the United States is already in a recession and have reacted accordingly by becoming increasingly concerned with job security and by curtailing spending, according to the Principal Financial Group's Well-Being Index.
The index, a survey of retirees and employees of small and mid-size companies (with 10 to 10,000 employees), revealed that 47% of the respondents ranked job security as their top concern, up from 39% one year ago.
Their concerns could be well-founded. The number of people filing first-time jobless claims exceeded expectations last week, CNN reports.
The Conference Board's new Employment Trends Index also reflects data showing a weak labor market. "We forecast further softening in the labor market, a moderate rise in unemployment and weaker wage growth over the next several quarters," says Gad Levanon, senior economist at the New York-based group.
"Employers will find it easier to recruit and hire, and will be looking at slower growth in compensation costs. Workers will find it harder to get a job, a raise or a bonus — all of which will further rein in consumer spending," he adds.
Meanwhile, the Principal Financial Well-Being Index saw a significant increase in the percentage of workers (56%) and retirees (55%) that say they have cut back on spending due to tough economic times, up from 38% and 32% (respectively) in fourth-quarter 2007.
Cost-cutting methods included driving less (56% of workers and 56% of retirees surveyed), eating out less frequently (61% and 49%), and buying generic products more often (55% and 47%).
