Despite the abrupt national economic slowdown, Minnesotans remain fairly upbeat about their personal circumstances. A Minnesota Public Radio and St. Paul Pioneer Press poll indicates more than 80 percent of state residents feel their household financial situation will be the same or better a year from now.
FEDERAL RESERVE BOARD CHAIRMAN Alan Greenspan says U.S. economic growth slowed last year, perhaps even to the point of stalling at year end.
Yet the poll of 625 registered Minnesota voters conducted earlier this month found consumers far from glum. Asked to project their household financial situation in a year, only 15 percent said it would be worse. Nearly two-thirds it would be the same, and 21 percent said it would be better.
For respondent Sandy Mathison, a teacher living in East Central Minnesota, the job market is a major factor in her sense of comfort.
"For those people who are starting out in the job market, there are a lot of options, and for people who may want to be switching to a better place, there does seem to be both training opportunities around here and additional places to work," Mathison says.
As for the past year, the poll results indicate 86 percent of Minnesotans felt their household financial situation improved or stayed the same. The poll has a margin of error of plus- or minus-four percentage points.
The results follow convincing evidence of a slowdown in Minnesota. Initial claims for unemployment insurance in the fourth quarter jumped to levels not seen since the last recession. The trend continued last month, with a nearly 27 percent jump in January claims, compared to the year before. State officials say it's not clear how much is a result of a cooling economy or cold weather. While layoffs leave some workers in a grim situation, others may not feel that way.
"I think my prospects are probably pretty good," says Alan Walk of Oakdale.
After almost 32 years with the same printing company, Walk - not a poll respondent - has about a month left. His division was sold. About 100 people are losing their jobs, including his wife. But with the Twin Cities' labor market still tight, Walk displays nothing but calm.
"I've talked to other guys that are actively looking right now. They don't have the severance package that I have. Some of them have already lined up jobs, and I look at these guys and I figure if they can find something, I certainly ought to be able to," Walk says.
State economist Tom Stinson says the poll results are good news. Consumer spending accounts for two-thirds of the nation's economic activity. At a time when the economy stumbles, Stinson says consumer faith or fear can be the key to the future.
The consumer's always right. In economics, once they believe the sky is falling, they're likely to cut back their spending and, indeed, the sky does begin to fall on the economy. But, as long as the consumer is happy, as long as the consumer is optimistic, the sky is unlikely to fall," says Stinson.
Despite the spike in unemployment insurance claims, Minnesota's unemployment rate remains very low. The national economic data are also equivocal. In January, for example, even as the national unemployment rose two-tenths of a percent, the economy added 268,000 new jobs, the most since last April.
Jay Mousa of the Minnesota Department of Economic Security says the data reflect a split between the manufacturing and service sectors of the economy.
"We're seeing layoffs in car manufacturing and the goods producing sector in general due to lower orders and consumer confidence being lower and delaying big ticket item purchases, but on the services side we are seeing a healthy economy," according to Mousa.
Even so, consumer confidence continues to drop nationwide. Fed Chairman Alan Greenspan said last week it remained at levels consistent with continued growth, not a recession. But he also warned that downside risks dominate.