High gas prices, failure of the government to control the federal deficit, and persistently high unemployment has soured the attitude of workers toward investing, a poll released Thursday says.
The poll conducted by Gallup for Wells Fargo & Co. shows investor optimism slid from February to May.
The investor optimism index measured by the poll fell to 33 in May from 42 in February. The index hit its all-time low of negative 64 in February 2009 as the stock market was hitting its bottom.
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Prior to the economic downturn, the index was soaring at 95 in May 2007.
The top three factors hurting the investing climate are the price of energy, cited by 79 percent of respondents, the federal budget deficit at 75 percent and the unemployment rate at 67 percent.
The May poll shows optimism among workers fell 31 percent from 35 in February to 24 in May while U.S. retirees maintained a consistent optimism level of 61 in both the February and May polls.
The Wells Fargo/Gallup Index is based on quarterly telephone interviews. The poll was conducted with 1,099 investors aged 18 and older from May 2 through May 10. Of those questioned 64 percent were working and 36 percent were retired. The average age of retirees surveyed is 69 and that of workers is 45.
The significant drop in optimism among workers was startling, said David Carroll, head of Wells Fargo's wealth, brokerage and retirement business.
Retirees likely remain optimistic because their income from pensions and Social Security is secure, Carroll said. Workers, however, face an assortment of challenges that come with a jobless recovery in which unemployment remains high, wages are stagnant, and costs for everyday items are increasing.
"You have 45-year-olds struggling with the day-to-day cost of living and an outlook where they don't have high confidence," Carroll said.
A large majority — 65 percent — of workers say their 401(k) will be a major source of income in retirement. Just 33 percent said they expect pensions to be a major funding source. For retirees pensions figure much more prominently with 46 percent saying they have pension income.
Only 30 percent of workers expect Social Security to be a major source of income. More than 50 percent of retirees rely on it as a major source.
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