Hopeful about economy, but still losing sleep

Boston area residents are more optimistic about the economy and their
own financial prospects than the nation as a whole, but they continue to
cut spending as many struggle to make ends meet, according to a survey
released today by banking giant Citigroup.

Boston’s brighter outlook is the result of the region faring better
in the recession than other parts of the country, particularly the Midwest,
which was battered by a slumping auto industry, and the South, hard hit by
the housing collapse, said Lisa Caputo, Citi’s executive vice president for
global marketing and corporate affairs. But ‘‘better’’ remains a relative
term.

About seven in 10 Bostonians still describe local business conditions
as only fair or poor, according to the survey. One in five women said they
can’t sleep because they’re worried about paying household bills. About one
in four men said fear of losing a job keeps them up at night. As a result,
one in two residents said they are putting off major purchases such as
cars.

‘‘What we see happening is a reset,’’ Caputo said. ‘‘People are going
back to basics. No one is going back to the old ways of doing things.’’

The survey of 500 residents, conducted in September, is consistent
with other recent polls, which have found hints of optimism in
Massachusetts overshadowed by economic anxiety. This anxiety, much of it
related to weak labor markets, has consumers keeping tight reins on
spending, and economists forecasting a long, difficult recovery.

A Suffolk University/Boston Globe poll last month found that two of
three Massachusetts residents believed an economic recovery was underway,
but nearly half were worried about losing their jobs. The October consumer
confidence survey by Boston consulting firm Mass Insight Corp. also found
that Massachusetts residents were more optimistic than consumers
nationally, but still insecure.

Nearly 60 percent said jobs were hard to get, and 64 percent expected
no job growth over the next six months.

‘‘There are these small surges of optimism that get squashed by
negative news,’’ said Mass Insight president William H. Guenther. ‘‘And the
thing that people are feeling the most is the job market.’’

The Massachusetts unemployment rate, 9.3 percent in September, was
the highest since 1976, but still below the national rate of 9.8 percent in
September. In October, the national rate jumped to 10.2 percent. The state
reports the October unemployment rate in Massachusetts Thursday.

In the Citi survey, four of 10 Boston residents said they had dipped
into savings or investments to pay bills. One in three said they were
working longer hours to make ends meet. The greatest concern for the
household budget: the rising cost of health care.

Still, the view of the future was brighter than current conditions.
Nearly two of three residents surveyed by Citigroup, or 65 percent, said
they expected the local economy to improve over the next year, compared to
57 percent nationally. Nearly 70 percent of those surveyed in Boston
expected their own financial positions to improve in the next year,
compared to 65 percent nationally.

An improving Massachusetts housing market is also providing a lift,
as both sales and prices have risen in recent months. Nearly two out of
three Boston homeowners, or 64 percent, said they believed they could sell
their home for more than they paid, compared to 57 percent nationally.

The Citi survey had a margin of error of plus or minus 4.4 percentage
points.