To track American perceptions of the economy, my public-opinion research firm, StrategyOne, conducted a nationally representative telephone survey of 1,000 American adults between June 12 and June 15, and then tracked these data again between July 16 and July 19. The results suggest a souring American view of the economy. Call it the summer of our economic discontent.
StrategyOne asked American consumers if they think the U.S. economy “has already bottomed out and is getting better,” “is at bottom and not getting any better or worse,” or “has not yet bottomed out and will still get worse.”
As you can see in this table, nearly half of American adults feel the economy has further to fall. Indeed, there has been a general trend toward economic pessimism with a corresponding drop in the percentage of Americans who feel the economy “has already bottomed out and is getting better.”
In our June survey, only one income group, those households earning more than $100,000 per year, were more optimistic (44 percent) than pessimistic (37 percent). This has now changed, as affluent Americans appear to have increased their pessimism by 10 percentage points.
With the exception of the $35,000–$50,000 household-income group, the percentage of each income segment who believe things have bottomed out and are getting better has dropped since June.
When we examine the data by educational attainment, we find a similar pattern. College graduates have become less optimistic about the economy (40 percent to 33 percent) and more pessimistic (40 percent to 43 percent). More than that, each educational subgroup has become less optimistic about the economy in the past month.
Last month, Americans in the South and West were the most pessimistic about the economy. In July, the Midwest’s economic pessimism increased dramatically, possibly as an aftershock of the auto industry’s generational restructuring.
Unfortunately, this suggests that reduced consumer spending and product substitution in consumer packaged goods, travel, and other areas will continue for most American households into the foreseeable future.
If this pattern of economic pessimism holds or does not appreciably improve before the mid-term elections in 2010, history suggests that incumbents will struggle against challengers who aggressively pin economic angst on them.
Although it is difficult to predict the end of the recession or the long-term impacts of the so-called “Great Consumer Retrenchment,” these data suggest that 2009, and possibly 2010, will be a year marked by economic turbulence.
But it is worth noting that economic pessimism does not necessarily translate into general pessimism. In fact, a defining characteristic of American public opinion is long-term optimism about the individual’s ability to make a difference and about society’s ability to improve.
– Robert Moran is executive vice president of StrategyOne.