A pair of recent
Gallup Polls shows distinct loss of confidence in the US economy. The first
poll shows Americans' Economic Confidence at the 2011 Low. A second poll
shows 55% still think the economy is in a recession, or worse.
Please consider Americans' Economic Confidence Declines Further
Gallup's
Economic Confidence Index dropped to -39 in the week ending April 24 -- a new
weekly low for 2011. This continues a downward trend that began in
mid-February. The current deterioration of confidence contrasts sharply with
the improving trend found at this time a year ago.
Optimism About Economic Outlook Drops to 2011 Low
Slightly more than one in four Americans said the economy is "getting
better" last week. This measure has been declining since mid-February,
and is now at its 2011 low. Far fewer Americans currently feel the economy is
improving than held that expectation a year ago, when 41% said things were
getting better.
Just 12 months ago, economic confidence was improving and there was talk of
"frugality fatigue." The U.S. saw a sharp spike in spending --
particularly among those with higher incomes -- during May 2010. Things were
looking up for the nation's retailers and the economy as a whole until the
debt crisis in Europe surfaced.
This year, economic confidence is going in the opposite direction. There is
an increasing danger of stagflation as prices surge and the economy slows. As
a result, retailers and the economy could find it difficult to match last
May's sales performance in 2011.
Survey Respondents
Think US Still In Recession
For example, please consider More Than Half Still Say U.S. Is in Recession or Depression
More
than half of Americans (55%) describe the U.S. economy as being in a
recession or depression, even as the Federal Open Market Committee (FOMC)
reports that "the economic recovery is proceeding at a moderate
pace."
Right now, do you think the economy is growing, slowing down, in a recession,
or in an economic depression?
Although economists announced that the recession ended in mid-2009, more than
half of Americans still don't agree. These ratings are consistent with
Gallup's mid-April findings that 47% of Americans rate the economy "poor" and 19.2% report being underemployed.
In another possible disconnect with monetary policymakers, many Americans may
not see the trade-off Bernanke suggests between promoting a stronger economy
and experiencing higher inflation. Right now, prices are soaring, yet the
latest Gallup Daily tracking data show that 67% of Americans say the economy is "getting worse."
Majority Do Not See A Recovery
Is
there a recovery? The answer is in the eyes of the beholder. Turn on
mainstream media and the answer would likely be a resounding yes. Take a poll
of average citizens and the answer is clearly different.
The one bright spot in the Gallup survey is 27% of respondents now think the
economy is growing. This is up from 3% in September of 2008. However, there
are more who think the US is in a depression than a recession, and more who
think the US is a depression than think the economy is growing.
With rising gas prices, rising food prices, falling real wages, and falling
nominal wages for many households, it should not be difficult to figure out
reasons for declining sentiment.
Recovery is a Mirage
There is no real recovery, at least in any meaningful sense. Unemployment is
down, but employment is not up. The economy is finally adding jobs, but at
snail's pace compared to any normal recovery.
Mean Unemployment Duration Weeks
If you lose your job, good luck finding another one quickly. You will
need it.
Civilian Employment
Does that depict a recovery? Before you answer, bear in mind that
Bernanke estimates that it takes 125,000 jobs a month just to hold the
unemployment rate flat.
The only reason the unemployment rate has fallen is 2.3 million workers
dropped out of the labor force in the last year alone, smack in the midst of
an alleged recovery.
Take away government spending, unemployment insurance, and food stamps and
you have a widespread economic depression. Gallup respondents realize that;
The average commentator on mainstream media doesn't.
Mish
GlobalEconomicAnalysis.blogspot.com
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