Minnesotans are suddenly feeling better about their finances than they have in a long time.
A new Minnesota Poll shows that 61 percent of Minnesotans rated their financial situation as good or excellent in June, a huge jump from February, when 45 percent gave their finances positive marks. An additional 29 percent rated their finances as fair, while 8 percent said their finances are poor.
A booming stock market and rising home prices are likely behind the shift in sentiment, although Minnesota’s economy was also the fifth fastest-growing in the nation in 2012, and unemployment is more than two points below the national average.
People have been “down in the dumps” about the economy for longer than such indicators have justified, said Toby Madden, an economist with the Federal Reserve Bank of Minneapolis.
“I’ve been watching the numbers pretty closely, and we’ve been in an economic expansion for a while here in Minnesota,” he said. “We’re in an economic expansion in the United States.”
Minnesota’s economy grew at a rate of 3.5 percent in 2012, faster than any state in the region other than North Dakota. The jobless rate is 5.3 percent, and has been about two points below the national rate since early 2010. Yet Star Tribune polls have shown that Minnesotans’ rating of their own financial situation did not improve from October 2008 to February 2013.
What may have finally persuaded Minnesotans in the past few months has been improvement in two highly visible economic indicators — stocks and home prices. The headline-hogging Dow Jones industrial average has gained almost 9 percent in the past four months, rising above 15,000 for the first time in its history.
“The stock market’s gone up a lot, and there’s been more and more positive news about home prices,” Madden said. “The average person probably has a home and therefore they feel wealthier.”
The cheeriest in the state are those 65 and over: 17 percent of older people described their financial situation as excellent and 48 percent rated it good.
“The economy is doing really well, for one thing,” said Violet Dorumsgaard, 74, of New Brighton. “Especially in Minnesota. I also think in Minnesota we have a high level of education. Anyone who wants to make it in Minnesota, they will, because we have so many great things for people to do.”
Her husband, she said, worked for 42 years as an electrical engineer at Unisys, logging 80-hour weeks and socking money away the whole time.
“We have it good,” she said. “But you know, we worked for it, too.”
Minnesotans are also slightly more encouraged about their financial futures. The poll found that 26 percent believe their personal financial situation will improve, 59 percent say they expect it to stay the same and 14 percent say they expect it will deteriorate. Four months ago, 24 percent said it would improve, 54 percent said it would stay the same and 17 percent thought it would get worse.
Tom Tenn, 71, of Excelsior, has a business that manages senior care centers. His business is stable, and wasn’t much affected by the economic downturn.
“We’re in good shape,” he said.
The larger economy worries him, because he believes growth is being fueled by the Federal Reserve and might not last.
“Is the economy getting better? Yeah, probably a little bit,” he said. “Is it getting as well as everybody claims it is? I don’t think so.”
Younger poll respondents were less positive about their financial situation than their older counterparts.
Among those between 18 and 34, 10 percent said their situation is excellent and 45 percent said their situation is good. Among those between 35 and 49, 12 percent listed their situation as excellent and 50 percent said their situation is good.
Jessie Cordiak, a self-employed contractor who started driving a school bus and farming to make ends meet when the housing market collapsed, said it feels like the economy is improving, but slowly. He rated his financial situation fair.
“I don’t get a lot of time with my family because I’m always working and I feel like I’ve got to work extra hard to make it,” said Cordiak, 42, of Hinckley. “I’m still skeptical.”
He employed five people building homes during the summer five years ago, but this summer he doesn’t expect to hire anyone. He expanded his cattle and crop-farming operations at what used to be a hobby farm, and he’s hoping some investments in that operation will pay off.
“I’m looking forward to hopefully a better year,” he said. “But at this point it’s been pretty much the same.”