By U.S. government accounts, the longest economic slump since the Great Depression of the 1930s came to an end on March 31, a date that sealed the third consecutive quarter of growth. According to the U.S. Bureau of Economic Analysis, the country’s gross domestic product — the measure of its total output of goods and services — grew 3.2 percent in the first quarter of 2010 as consumer spending rose at the fastest pace in three years, after growing 2.2 percent in the third quarter of 2009 and 5.6 percent in the fourth quarter.
Using the formula that three straight quarters of GDP growth signal the end of a recession, the recession that started in December 2007 is finally over.
That does not mean that the pain of the recession is over for most Americans, Blacks and Hispanics in particular. According to the National Urban League’s 2010 State of Black America report, unemployment among Blacks was 14.8 percent in 2009, 12.1 percent among Hispanics, and 8.5 percent for whites. By the first quarter of 2010, Black unemployment had spiked to 16.5 percent, nearly twice the country’s overall unemployment rate of 9.9 percent. For Black males, the first-quarter figure stood at 20.2 percent, while it was roughly 41 percent for Black teenagers. Hispanic male unemployment at the same time was 13.8 percent and for white males, 9.6 percent.
At the start of the recession, the unemployment rate for Blacks was 8.9 percent and 5.8 percent for Hispanics.
Six months into the last year of the 21st century’s first decade, Blacks in America are facing a an economic recovery of slow hiring, with many of the eight million jobs lost during the recession unlikely to return. Recent surveys give insights into African-American views on key economic issues, personal wealth and the outlook for the future.
Between April 9 and 23, some 3,000 mostly college-educated African-Americans responded to a survey on the outlook for the country’s economy and what its priorities should be. The “2010 Economic Survey of Black America” was commissioned by TheLoop21.com, a Web site offering analysis of economic and political news from the perspective of minorities, in partnership with Alpha Kappa Alpha Sorority Inc.
Ninety percent of respondents said job creation is more important than reducing the deficit. The majority of the respondents said racial discrimination and the recession are the biggest threats to their own job security were least concerned about competition from immigrants and did not believe tougher immigration enforcement is necessary to create job opportunities.
On matters of personal finance, one of the biggest concerns of respondents was credit-card debt, combined with worries about a lack of savings to cushion against emergencies. Despite their worries, survey respondents overall were optimistic about the future, with a large majority saying they expect the nation’s economy to improve over the next year.
On the critical issue of immigration reform, the majority of African-American respondents were not concerned that “immigrant competition” threatened their job security. In fact, African-American respondents were more concerned that “outsourcing of jobs” was a threat to their job security than competition from foreign workers in the United States. A majority of respondents did not agree that “tougher immigration enforcement is needed to create job opportunities” for them. Rather, the “current recession” was the top job-security concern, followed by “racial discrimination in the workplace and hiring.”
More than two-thirds of respondents indicated they need to “reduce credit card debt,” with nearly half saying that credit-card debt reduction was “urgently needed.” Despite the current housing crisis, the vast majority said they had no need to refinance their mortgage.
Overall, the respondents were optimistic about the U.S. economic outlook and their personal economic growth. Nearly three-quarters expected the U.S. economy to “significantly improve” or “moderately improve” in the next 12 months, and nearly as many expected their personal economic circumstances to improve in the next 12 months. This economic optimism corresponds to a strong trust in President Obama’s ability to revitalize the economy. Nearly 9 out of 10 respondents indicated that they were “somewhat confident” or “highly confident” that President Obama “has a plan to revitalize the U.S. economy.” However, fewer were confident that Congress would “do what is necessary to stimulate job growth” and nearly one-third was “doubtful” that they would do so.
Nationwide Insurance/The Tavis Smiley Group
In an online survey of 1,200 participants, commissioned by Nationwide Insurance and The Tavis Smiley Group, 58 percent of the African-American respondents expected their financial situation to be better a year later, compared to only 30 percent of the general population. However, most Black households said they did not have a financial game plan and many did not know where to start.
The survey was conducted in December 2009 by The Blackstone Group, a certified minority-owned, full-service custom marketing research and consulting firm. A Web panel collected national data for 1,202 respondents split into two sample groups of 601 respondents each — a general population group, ages 18 and older, and an African-American group, ages 18 and older. The survey has a margin of error of +/- 3.4 percent.
In its findings, African-Americans have made more positive changes in the past year than the general population as a result of the economy, including creating a household budget (37 percent to 31 percent), focusing on paying off credit cards or other debt (49 percent to 42 percent) and starting or increasing contributions to their 401(k) (8 percent to 5 percent).
Among the other highlights in the survey, African-Americans were more confident than the general population in their ability to make savings and investment decisions (52 percent versus 43 percent), but are also more likely to indicate they are struggling with credit card debt (38 percent versus 32 percent); fewer than one in four African-Americans have a written financial plan, nearly one in three don’t know where to start building a plan, and fewer than half are proactive about planning their financial future; African-Americans with children under 21 said they were very or extremely worried about being able to afford a college education for their children, but only one in 20 said they actually have a college savings plan. Only 3 percent said saving for education is their most important financial goal.
Nationwide Insurance and The Tavis Smiley Group are partners in an annual “On Your Side” tour in African-American communities, featuring speakers and workshops on various financial planning areas. This year’s tour will be in Cincinnati, Ohio, on June 19; Sept. 25 in Columbia, S.C.; Oct. 9 in Pittsburgh, Penn.; Oct. 30 in Greensboro, N.C.; and Nov. 6 in Baltimore.
Hamilton College’s National Youth Poll
Hamilton College, in Clinton N.Y., tracks the views of high-school sophomores, juniors and seniors. In a recent national survey of 818 high-school students’ attitudes toward the U.S. economy, conducted in collaboration with the research firm Knowledge Networks, Hamilton found African-American teens to be much more optimistic than white teens about their future prosperity compared to that of their parents. According to an April online survey, with funding by Hamilton’s Arthur Levitt Public Affairs Center, 69 percent of African-Americans said they believe they’ll have a higher standard of living than their parents, while only 36 percent of whites felt the same way. Overall, 39 percent of respondents believed they will be more prosperous than their parents.