Americans Bullish on Economy Despite Recent Wall Street Gyrations

By WILL LESTER, Associated Press Writer

WASHINGTON (AP) - The stock market's gyrations are making some people more cautious with their money, but two-thirds of American adults say they have not changed their spending habits, according to an Associated Press poll.

More than 90 percent of those polled say they believe that a year from now their family's financial situation will be as good as it is today or better.

"We have less money on paper, but it's not worrying us right now," said Leslie Crismon, a Phoenix homemaker and mother of five. "Our stock market investments are for our retirement. I'm not planning on touching those stocks for quite a while."

Recent financial news made 30 percent more cautious about spending, according to the survey conducted for The Associated Press by ICR/International Communications Research of Media, PA.

But most people said interest rates and the job market were more important to them than the stock market. Interest rates were cited by 44 percent as the most important factor, followed by the job market at 35 percent and the stock market at 13 percent.

"I am just renting right now and have been thinking about purchasing a home of my own," said 25-year-old truck driver Wayne Nelson of New York Mills, Minn. "Loan rates might be important to me."

Unemployment and inflation rates are the best they've been in a generation, and falling interest rates have spurred a boom in housing sales. Four out of five people in the poll said their family's financial situation was better now than it was a year ago.

"Middle Americans are still focused on the basics of life," said Astrid Adolfson, an economist with the financial advice group MCM MoneyWatch in New York. "People can get jobs, people can refinance and buy houses, they have real disposable income. Middle America is still optimistic. They don't watch the stock market directly, they watch it indirectly."

A day after posting a record 380-point gain, the Dow Jones industrial average fell 155 points Wednesday to 7,865, slipping back below this year's starting point of 7,908.25.

Young adults were more optimistic about their family's financial future in the coming year than older adults, the poll indicated. About two-thirds of adults age 18 to 44 said they expect things to improve.

"I feel secure today," said Martin Gasinger, a 30-year-old truck driver from Hubbard, Ore., who is married and has three children. "The stock markets do not affect a head of lettuce being shipped by my company."

But only 20 percent of people over 65 said they were optimistic that their family finances would be better a year from now.

"My sole source of income is Social Security," said Jerry McElroy, a retired engineer from San Antonio, Texas. "As costs go up, Social Security doesn't go up that much. So I don't look for things to be too much better."

Most people didn't share his pessimism, despite Wall Street's ups and downs.

"We've had a lot of market volatility over last two decades and the economy is still a very healthy mechanism that people have a lot of trust in," said Gary Thayer, a senior economist with A.G. Edwards, a brokerage house in St. Louis. "We've seen these problems come and go. They look at the more immediate things that would affect them like their jobs or interest rates."

Nearly 40 percent said they had stock investments. More than half of people between 45 and 54 said they invested in the market, but at least 30 percent in every age group were investors. Whites were twice as likely as blacks to invest in stocks, according to the phone survey of 1,010 adults from Sept. 2-6. The poll has a margin of error of plus or minus 3 percentage points.