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Into Jobs Report, Investors Fed up With Washington

Written by: Brian O'Connell 08/02/12 - 12:51 PM EDT
Tickers in this article: WFC

The survey, conducted monthly, shows fading investor optimism. Its "optimism" index stood at 40 in February 2012, but slid to 24 in May and stands at 16 in July. Only 41% of all investors say "now is a good time to invest in the markets" as opposed to 48% in May and 52% in February.

The Wells Fargo-Gallup report also focuses sharply on the "fiscal cliff" issue, drawing the following conclusions:

  • 54% of survey respondents say they are highly aware of the U.S. debt issue.
  • 61% say that the U.S. economy will sink into recession if Congress doesn't take steps to avoid the fiscal cliff.
  • 71% say concern among consumers toward the U.S. debt picture will cause them to spend less, thus further hampering economic recovery.
  • 75% of investors surveyed expect the results of the upcoming presidential election will "impact their net worth," with 43% saying the results will have a "major impact."
  • 37% of respondents said they were better off than they were in 2008, while 33% said they were worse off.
  • Fewer investors are saving money. Only 24% of U.S. investors are saving more money than they did before 2008, while 43% said they are saving less money.

    • Maybe it's good news that Americans are tuned in to the U.S. debt issue, and increasingly, are demanding that politicians work out a viable solution. The bad news is more and more of them doubt that will happen, and that bad economic times loom as a result.

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    "People watched the impasse of the debt ceiling negotiations last summer and the effect the breakdown had on the markets and 401(k) balances, so it makes sense that investors are attuned to policy affecting debt and taxes," explains Joe Ready, director of Wells Fargo Institutional Retirement and Trust. "Still, investors are clearly telling us they worry about a recession."

    The way things are going in Washington, and in the economy, they should be.

    By Brian O'Connell

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