Confidence in economy appears to be declining

Even when experts were declaring the economy healthy, many Americans voiced a vague, but persistent, dissatisfaction.

True, jobs were relatively plentiful over the last few years. It was easy to borrow and extremely cheap. The sharp rise in the value of homes and plentiful credit cards encouraged a nation of consumers to get out and buy. But to many people, something didn't feel right, even if they couldn't quite explain why.

Now the economic tide is receding, and the undertow that was there all along is getting stronger.

Take away the easy credit and consumers are left with paychecks that, for most, haven't nearly kept pace with their need and propensity to spend.

The frustration of $3 gas and $4 milk, the worries about health-care costs that have risen four times the rate of pay, become much more real. The retirement security that is only as good as the increasingly volatile stock market seems much less certain.

Americans' declining confidence in their economy is triggered by a storm of recent pressures, including plunging home prices, tightening credit, and heavy debt. But it is compounded by anxiety that was there all along, the result of a long, slow drip of worries and vulnerabilities.

"The economy is currently in recession or arguably close to recession and that's certainly weighing on the collective psyche," said Mark Zandi, chief economist of forecaster Moody's Economy.com. "But ... I do think there is an increasing level of angst that is more fundamental and is not going to go away even when the economy improves."

Much of that anxiety is the uncomfortable, but expected jolt of the economic roller coaster. During a downturn, people become less confident about keeping their jobs or being able to find new ones, meeting household expenses and about the prospects for the future.

But there may be more to it than just cyclical ups and downs.

What does the economic future hold? Many Americans feel increasingly unable to answer that question with assurance, and they appraise it with a sense that they are less in control of the outcome.

In Westminster, Colo., a Denver suburb, George Apodaca hears that uncertainty from the maintenance workers, drivers and others enrolled in the home budgeting class he teaches. Most have steady jobs, but are just getting by. They talk about challenges like the rising cost of getting to work or medical bills, not as new problems but as a continuing struggle.

"People in my class, they don't know what a recession means or what a boom means," said Apodaca, a counselor for Colorado Housing Enterprises. "They're worried about buying the groceries, buying the gas."

A year ago -- months before economic alarms went off -- nearly two of three Americans polled by The Rockefeller Foundation said they felt somewhat or a lot less economically secure then they did a decade ago. Half said they expected their children to face an economy even more shaky.

Other polls have registered similar unease in the past few years, showing large numbers of Americans dissatisfied with the economy, and worried about retirement security, health care costs, and a declining standard of living.

The surprising thing about many of these readings isn't that they've recently skyrocketed. It's that in recent years they've registered consistently high levels of worry without ever seeming to ease.

"This has just been a period of great disconnect between what the aggregate economic statistics show and what leading politicians talk about and what ordinary Americans are feeling," said Jacob Hacker, a Yale University professor and author of "The Great Risk Shift," which charts increased economic insecurity. "I think people are saying, where did the gains go? Where did the boom go? And now that it's gone, what are we going to do?"

The pullback by consumers contrasts with years of continued spending that long seemed to contradict mounting worries.

Worker optimism, which soared in the late 1990s, never fully rebounded after the last, brief recession. Although jobs again were plentiful, it became clear the new economy's opportunities came with few of the old assurances.

Rennie Sawade, the son of a Michigan auto worker, majored in computer science because he saw no future on the assembly line. He was rewarded with a job at Oracle Corp., but lost it in late 2005 when the company shifted his department's work to India. Sawade, who lives in Woodinville, Wash., near Seattle, has been unable to find a full-time replacement, instead jumping from contract job to contract job.

The contractor offers a 401(k), but contributions are entirely up to workers. When Sawade's wife was diagnosed with thyroid cancer last year he missed the equivalent of two weeks of work -- and pay -- to take care of her. The job has health insurance but still left the family with a bill for more than $2,000. Contractors call to offer other jobs, but the pay is frequently disappointing, he said.

"It was pretty well known when I was working on my bachelor's degree that the auto industry was going to move overseas," he said. "Everybody said get into technology because you'll have a career. Now it looks like the same thing is happening to technology."