Americans Increasingly Upbeat, but Still Think Country Is in a Recession

GALLUP NEWS SERVICE

PRINCETON, NJ --

Recession

Federal Reserve Chairman Alan Greenspan told Congress last week that the recession in the United States appeared to be ending. The average American, however, has yet to be convinced. Fifty-six percent of Americans say that the economy is now in a recession, a figure that is only slightly lower than that of this past November, when we last measured these perceptions.

We have asked this question nine times over the last year. The low point was measured last March, when only 31% said "yes" when asked if they thought the economy was presently in a recession. The November 2001 figure of 59% is the high point.

The perception that the country is in a recession, however, is nowhere near where it was in the dark days of the early 1990s. At one point in 1992, for example, over eight out of 10 Americans said that the economy was in a recession.

Do you think the economy is now in a recession, or not?

BASED ON -- 389 -- NATIONAL ADULTS IN FORM A; ±5 PCT. PTS.

Number One Problem

About three out of 10 Americans spontaneously mention the economy as the number one problem facing the country today. That's down from last month, when 40% said that the economy was the top problem. The salience of the economy, in response to this question, has varied over the months since Sept. 11. In October, for example, only 20% mentioned the economy, because many Americans were focused on terrorism and the war. As terrorism now has faded as a top-of-mind concern, perceptions of the economy as being the number problem have increased. The 29% figure measured this month, however, is still 10 percentage points lower than the measure taken in early September in the last poll conducted before Sept. 11.

Historically, mention of the economy as the top problem facing the country had fallen as low as 13% in May 1999. On the other hand, at several points during the recession of the early 1990s, the economy swamped all other mentions. At one point in 1991, for example, over seven out of 10 Americans said that the economy was the number one problem. At no point over the last year or two of this economic downturn have we found the economy dominating this "number one problem" measure at any where near this degree. The 40% figure from February of this year, in fact, is the highest measured since 1996.

What do you think is the most important problem facing this country today? [Open-ended]

Rating the Current Economy

Americans' ratings of the current economy have remained fairly negative and basically unchanged for the last five months. Thirty-four percent say the economy is in excellent or good shape, while 51% say it is only "fair" and 14% rate it as "poor." In the last measure taken before Sept. 11, 32% gave the economy an excellent or good rating. That number jumped in the week following the terrorist attacks, reflecting the general rally effect that often follows these types of national events. But, it settled back down to the point where roughly three out of 10 Americans gave the economy a positive rating in November, December, January, and February; and most recently give this rating again in March.

The most recent high point for this measure was measured in June 1999, when 74% rated the economy as excellent or good. The low points since January 1992 (when Gallup first began using this particular measure of the economy) came in late August 1992, early September 1992, and then again in August of 1993, when only 10% gave the economy an excellent or good rating. Also, during the recession years of the early 1990s, as many as half of the public gave the economy a "poor" rating. The highest number on this "poor" scale in the current downturn has been only 19%, in both early September and in November of last year.

How would you rate economic conditions in this country today -- as excellent, good, only fair, or poor?

The Direction of the Economy

Despite the generally flat trajectory of Americans' ratings of the current economy, expectations about the direction of the economy have moved into much more positive territory in March. Indeed, the percentage of Americans now saying that the economy is getting better -- 54% -- is as high as we have seen it since October 2000.

This "getting better" number is a very sensitive indicator that has varied substantially over the last 10 years, from as high as 69% in January 2000 to as low as 19%, registered both in early September of this year (just before Sept. 11) and in December 1991.

The more recent path of this indicator shows a "u-shaped" pattern. The last time over 50% said the economy was getting better was in October 2000. The number then fell, dropping in the 20% range throughout the first part of 2001, until bottoming out (as noted) at 19% in our Sept. 7-10 poll.

Since that point, however, the perceptions of the direction of the economy have been improving fairly steadily. There was a setback last month, when the "getting better" number went from 49% in January to 41% in February. However, this month's 13-percentage-point gain puts the measure into majority territory again, and may signify that consumers are beginning to endorse the idea of a significant recovery.

Right now, do you think that economic conditions in the country as a whole are getting better or getting worse?

Survey Methods

These results are based on telephone interviews with randomly selected national samples of 1,006 adults, 18 years of age and older, conducted March 4-7, 2002; and 802 adults, 18 years of age and older, conducted March 8-9, 2002. For results based on these samples, one can say with 95 percent confidence that the maximum error attributable to sampling and other random effects is + / - 3 percentage points and + / - 4 percentage points, respectively. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.