Only 1 American in 7 has faith a lasting economic recovery has taken hold and a plurality say they are personally worse off than they were two years ago.
Almost half of the respondents in a Bloomberg National Poll conducted March 4-7 believe the U.S. is in a “fragile” rebound and could fall back into recession. More than a third of the country believes the U.S. never emerged from recession.
Sixty-three percent of Americans say the nation is on the wrong track, compared with 66 percent who said so in December, which was the lowest in the national mood in the one and a half years the Bloomberg poll has been conducted.
The gloomy outlook contradicts economic data showing an economy on the mend, including six quarters of economic growth, a 95 percent rise in the Standard & Poor’s 500 index over the past two years and job growth last month of 192,000. The National Bureau of Economic Research officially dated the end of the recession to June 2009.
Almost half of poll respondents say they are personally worse off than they were two years ago, when the country was losing 796,000 jobs a month and the economy was shrinking at a 4.9 percent annual rate. The stock market hit its post-financial crisis low two years ago yesterday.
“There seems to be something of a disconnect between what people are feeling and what people are doing,” says J. Ann Selzer, whose Des Moines, Iowa-based firm, Selzer & Co., conducted the poll. “While admitting a recovery has at least started, the public still feels crummy. They may not feel it has started for them.”
Bearish Tea Party
Tea Party supporters are even more bearish. A majority of them say the country is still in recession. Only 3 percent of Tea Party supporters see a recovery gathering strength.
The survey was conducted as two potential threats to the economic recovery emerged: a dispute in Congress over the federal budget that could lead to a government shutdown and a surge in oil prices since the beginning of unrest in Libya. Through March 4, the first day of the poll, gasoline prices posted their steepest two-week gain since Hurricane Katrina disrupted oil production in the Gulf of Mexico in September 2005, according to the Lundberg Survey of fuel prices.
A year ago, the U.S. economy showed strengthening growth and rising job gains only to slow as the European debt crisis intensified and the impact of the $814 billion in federal stimulus spending faded.
While the 8.9 percent unemployment rate in February is the lowest in 22 months, American workers have been slow to make up lost ground. Only 1.3 million U.S. jobs have been regained of the more than 8.7 million lost since January 2008.
“I don’t think it’s going to get much better,” says poll respondent Robert Lockhart, an 85-year-old retiree in Luray, Virginia. “Most of our jobs are overseas. They send the parts back here to put together. But your refrigerators, your TVs are produced overseas.”
The Bloomberg poll results portray an American public pulled by economic crosscurrents as it comes out of a recessionary crouch.
“Companies seem to be sitting on excess cash,” says poll respondent Brett Gora, 23, a financial analyst in Reston, Virginia. “They’re holding onto it because these are still uncertain times.”
The poll also shows that in some cases, consumers’ actions belie the discontent they express about the direction of the economy. Almost 4 of 10 respondents say they are spending more on purchases, entertainment or vacations they had put off, though more say they are concentrating on amassing savings or paying down debt. Even among those who say they are now worse off than they were two years ago, 22 percent are loosening the purse strings.
This disconnect shows up in economic data, too: Even with the increase in gas prices, U.S. automobile sales in February grew at the fastest pace since the Obama administration’s “cash-for-clunkers” program expired in August 2009.
While a 49 percent plurality say they are worse off than two years ago, the portion who say their situation has improved is rising, to 39 percent from 35 percent in December. Among people under 35, a 55 percent majority believes their personal situation is better than two years ago.
Concern over unemployment receded to 43 percent from 50 percent in December, though it remains the public’s top priority, ahead of the federal deficit.
Assessments of the housing market are mixed, with 4 out of 10 Americans believing home values in their neighborhood are declining while about the same number believe prices have stabilized. Another 17 percent believe home prices are rising. The S&P/Case-Shiller index of home values in 20 cities fell 2.4 percent during the 12 months ended in December, the most recent month for which data is available.
The poll shows the public isn’t sympathetic as financial industry executives and Republican members of Congress say that new banking regulations are hampering lending and interfering with the recovery.
Fewer than 1 in 5 Americans say stricter regulation is preventing banks from lending to businesses and homebuyers. They are twice as likely to believe banks aren’t regulated enough and endangering the economy with risky acts.
Antipathy toward Wall Street hasn’t changed since the immediate aftermath of the financial crisis. Only 30 percent of Americans hold a favorable view of Wall Street, compared with 31 percent who said so in September 2009.
The poll of 1,001 adults has a margin of error of plus or minus 3.1 percentage points.