Economic Pessimism Highest in 17 Years
Pessimism about the economy has jumped to its highest level since November 1990, according to the Washington Post-ABC News Consumer Comfort Index.
Sixty-eight percent of Americans say the economy is getting worse, a 13-percentage-point increase since October, and nearly 30 points above the long-term average for the question.
In the same survey, two-thirds say the economy is "not so good" or "poor" while the overall Consumer Comfort Index (CCI) stands at -19, nearly matching its low for 2007. Both numbers have stagnated at about the same level since late-August.
A widespread perception that a recession is looming could be behind the gloom and doom outlook. A Post-ABC survey released earlier this month found that 69 percent said a recession was very or somewhat likely in the next year, and 14 percent cited the economy and jobs as their top concern for the upcoming presidential contest.
Earlier this fall, the CCI showed some signs of improvement. By late-September, it had climbed from its 2007 low of -20 to -11 as consumers' perceptions of their own finances improved and gas prices fell (pump prices are historically correlated to consumers' ratings of the buying climate and the economy).
Since then it has gradually deflated as economic news on the volatility in the housing and stock markets have captivated the nation's attention and gas prices have again bumped over $3 a gallon.
More than four in 10 in the Pew Research Center's most recent weekly news interest index said they were following the news about rising oil prices "very closely," ranking this pocketbook issue above the war in Iraq, the 2008 presidential campaign and the political turmoil in Pakistan.
The CCI is a measure of consumer confidence, calculated on a scale of -100 to +100 using responses to three economic questions. They cover the state of the national economy, personal finances and whether it's a good time to make purchases.
The Post-ABC CCI is a rolling average based on telephone interviews with 1,000 randomly selected adults conducted over a four-week period which ended Nov. 18. The results have a margin of sampling error of plus or minus three percentage points. The once-a-month expectations question was asked of 500 respondents in interviews Nov. 4-18. That question has margin of sampling error of four points.
Q: Do you think the nation's economy is getting better, getting worse, or staying the same?
| Better | Worse | Staying the same | No opinion | ||
|---|---|---|---|---|---|
| Current | 7 | 68 | 25 | 1 | |
| Jan. 14, 2007: Best of 2007 | 18 | 34 | 45 | 2 | |
| Nov. 1, 1990: All-time low | 4 | 77 | 19 | 0 | |
| Long-term avg. | 20 | 39 | 40 | 1 | |
More information on the Washington Post-ABC News Consumer Comfort Index can be found here.
By Jennifer Agiesta |
November 20, 2007; 5:00 PM ET
Post-ABC Consumer Comfort Index
Previous: Black Democrats: A Gender Gap |
Next: Shaking Hands, Kissing Babies
Posted by: Donny | November 20, 2007 6:00 PM
Well.
The Post trumpets with alarmist headlines that the economy is IN BIG TROUBLE on a daily basis ... for years on end... then trumpets their own little poll that ... surprise !!... shows that many people in their sample are concerned about the economy.
Whether this nonsense is done out of ignorance, sloppiness, or partisanship, it is utterly unworthy of a great paper.
.
Posted by: gitarre | November 20, 2007 6:39 PM
I'm calling the bottom. (historically, the time when most are pessimistic is just at the turn around.)
It's time to invest, buy houses, look for that much better paying job.
-tchtic, straight up from there.
Posted by: tchtic | November 20, 2007 9:21 PM
"Donny" is right on the mark. If you think things are bad now, just wait until China, Japan, etc. cannot be convinced to finance the massive U.S. budget deficit unless we raise interest raise to compensate for the declining dollar. Things are about to get much, much worse.
Posted by: Concerned | November 22, 2007 9:00 AM
This, folks, is not news, the prototypical dog bites man story. Donny lays out some of it.
Y'all at the Post think this is news because the structural elements that are easy to measure are doing well, or at least aren't problematic. The stock market is growing, even the NASDAQ seems to be getting out of it's funk. Productivity gains are there, so consequently we're seeing growth. the trade deficit is growing ever larger, but it's never been a problem before. The opening weekend numbers for the holiday shopping season were good.
But all of that, if you will, is epiphenomenal, superstructure. The base of the economy, consumer spending has been declining steadily for years.
The basket of goods used to measure inflation and poverty is hopelessly out of touch with how people actually spend their money. The government keeps redefining poverty with the unsurprising result that fewer people are "poor" by that yardstick. And the shifting of income and wealth to an ever smaller percentage of the population necessarily takes dollars out of the economy.
Two-thirds of the economy is driven by consumer spending. Explosion of credit cards, low interest rates, the housing bubble all helped bolster that spending during some otherwise tough years. The gimmicks are just about used up and played out. And the boomers are about to retire.
It won't be pretty, I fear.
Posted by: Marco Panella | November 29, 2007 2:33 PM
This will drive the presidential election debate. Instead of religion, morality and XYZism, the key issue facing middle class americans will no doubt be "the economy, stupid."
Posted by: nwguy111 | December 4, 2007 7:13 PM
2008 Presidential Election Weekly Poll
New YouTube Video!
The Only Poll That Matters.
Results Posted Every Tuesday Evening.
Posted by: votenic | December 14, 2007 9:01 PM
I am amazed, as a senior who went through the depression, that there are so many Americans who fail to see what is staring them in the face. Hard times! Do they really think a Republican administration will ever side with working people? We need a revolution to come along and save us. The Democratic politicians have become fat and comfortable and there is hardly any difference in the two parties.
Posted by: dellpill | December 25, 2007 10:59 AM
The comments to this entry are closed.
I am truly amazed at how long it has taken for Americans to wake up to the fact that the U.S. economy has been driven into the ground over the last six years. Desperate interest rate cuts can only hide the truth for a while.
Inflation is runaway, though its not officially declared. Take notice of healthcare premiums, take notice of the price of gas, take notice of utility energy prices, take notice of the skyrocketing of college tuition.
Nevermind that the U.S. dollar is severly weakened as a currency. In 2000, the dollar was worth 1.35 Euros - today, the Euro is worth 1.35 dollars. And the slide continues...our debt to Chinese banks and OPEC nations is a sleeping giant.
For working folks, it hits home the hardest, housing prices are out of reach for first-time buyers and renters, and pensions are quickly becoming extinct.
Can anyone really be surprised at ecomonic pessimism?