In the summer of 2008, millions of Americans were beginning to feel the effects of the Great Recession.
A string of events occurred that shook the nation, such as the collapse of Lehman Brothers, the first bank bailout and the Fannie May/Freddie Mac takeovers.
That was five years ago. Yet, according to the latest COUNTRY Financial Security Index® survey, the majority of Americans don’t feel that their financial security has improved, even though economic recovery began around mid-2009.
The COUNTRY Index was measured before, during, and after the recession.
In August 2008 the index was at 69.9 and this figure gradually sunk to a low of 62.4 in August 2011.
However, despite many improvements in the economy, such as the jobless rate decreasing as well as increasing labor demand, the reading for June 2013 was only 65.9.
45 percent feel less financially secure than they did in 2008, with only 27 percent feeling more secure. In addition almost half believe that the economy is worse than it was five years ago.
The lasting effects of The Great Recession
The survey also asked Americans what they thought was the most significant lasting effect of the Great Recession.
Surprisingly, most Americans were more concerned about their reduced retirement nest egg (22 percent) than reduced home value (8 percent).
Over two thirds have had to make cut backs in their spending in order to meet basic needs, which is nearly the same as the rate in November 2008.
19 percent said that they believe that they will never recover from the effects of the recession.
Troy Frerichs, director of investments-wealth management at COUNTRY Financial, said:
“Although we are five years out from the height of a devastating financial crisis, the after-effects of the Great Recession are still top-of-mind for Americans. As a result, Americans, personally, may not be on the same page with reports about the state of the recovery. While we’ve come a long way, this recovery is by no means complete and we still have ground to make up. The important thing is not to look back, but to adjust to a new reality and redefine what financial security looks like in a perhaps permanently changed financial and economic landscape.”
The future of the US economy
It is evident that the Great Recession has greatly impacted how Americans view their future financial situation.
38 percent said that they expect their financial position to strengthen over the next five years, while 21 percent said it will remain the same, and 28 percent predict it will only get worse.
46 percent expect another recession to occur within the next five years, compared to only 22 percent who don’t.
36 percent said that job market improvements will make them feel more financially secure.
Frerichs concluded:
“It’s not surprising Americans have a cautious outlook on the next five years, given the ongoing impact of the recession. The best way to approach financial uncertainty is to be prepared for anything. Speaking with a knowledgeable professional can help you get a financial plan in place and make sure you’re set up for financial security no matter what outside economic factors are at play.”
A recent Harris Poll similarly found that the majority of the American public are not optimistic about their future financial position.
