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Five Different Reactions To Economy Among The Public

Five Different Reactions To Economy Among The Public

Economic and political attitudes highly correlated

by David W. Moore

GALLUP NEWS SERVICE

PRINCETON, NJ -- At the end of July, a CNN/USA Today/Gallup poll showed that Americans in general are giving the current economy low ratings, and a majority believes that the economy is getting worse, rather than better. Still, most Americans do not believe that the current economic situation constitutes a crisis, and most also express optimism about the longer-term prospects. Politically, Americans continue to give President George W. Bush high approval ratings, but are about evenly divided as to whether the country would be better off with the president's party or with its major opposition in control of Congress.

A special Gallup analysis of these survey results finds that Americans can be classified into five distinct groups on the basis of their assessment of the economy and the stock market, and that these five groups are highly associated with people's political as well as economic attitudes. The groups are derived statistically based on people's responses to three economic dimensions: 1) how worried they are about the effects of the worsened economy, 2) whether or not the recent fluctuations in the stock market impact their own financial situation, and 3) how optimistic or pessimistic they are about the future of the economy.

Economic Assessment Groups
July 29-31, 2002

The Disconnected -- What Me Worry? (31%)

As the preceding chart shows, the largest group of Americans can be classified as the Disconnected -- or what might more colloquially be termed the "What Me Worry?" group.

  • Everyone in this group indicates that the stock market has had no impact on their financial situation.
  • Only 14% say the fall in the stock market has shaken their confidence in the U.S. economy, and just 42% would characterize the economy as a crisis or a major problem -- by far the smallest percentages among the five groups.
  • Only 12% in this group say they are worried that the economy will force them to cut back their spending, again the lowest percentage of all the groups. The Cool and Comfortable (discussed below) comes closest to this group, with 20% worried about having to cut spending, while the other three groups show more than 80% expressing that concern.

The Cool and Comfortable (23%)

The second largest group, the Cool and Comfortable, are best characterized by their lack of concern and their relatively high financial situation.

  • The people in this group express relatively little worry about the effects of the economy and the stock market, but not -- as with the case of the Disconnected -- because the stock market has no impact on their financial situation. In fact, 20% say the markets have a major impact, and 80% say a minor impact.
  • This group is cool with the economy; it would appear, at least in part because of their higher economic position. Their average annual income of just over $64,000 is almost a third higher than that of the Disconnected, and a fourth higher than that of the second richest group (the Stressed Pessimists).
  • The Cool and Comfortable also enjoy the highest percentage of people (47%) with at least $50,000 in stock holdings. Thus, while their financial fortunes are tied to the gyrating stock market, they apparently have enough money that they are not particularly worried in the short term.
  • In the long term, this group is quite optimistic: 72% expect the stock market to be higher a year from now, one of the two highest percentages (the other is 73% among the Worried Optimists). By contrast, just six in 10 of the Disconnected believe the stock market will be higher, while just about four in 10 of the Strugglers and Stressed Pessimists express this view.

The Stressed Pessimists (20%)

This group is by far the most worried about the economy and its impact on the people's financial situation.

  • The aggregate annual income level of this group is slightly above average, at $51,000.
  • About a third say they have stock holdings of at least $50,000.
  • All indicate that the stock market has some impact on their financial situation: 34% say a major impact, and 66% say minor.
  • This group shows the highest percentage of its members saying they are worried that someone in their family will lose his or her job in the next year (50%), that they will not be able to maintain their standard of living (81%), that they will live less comfortably in retirement (85%), and that they will have to cut back on spending (94%).
  • In addition, more than two-thirds (68%) say they feel a great deal or moderate amount of stress because of the stock market decline, 13 percentage points higher than the second highest group (the Worried Optimists), and more than three times greater than the percentages in the other three groups.

The Strugglers (16%)

People in this group are worried about the economy; it appears in large part because of their relatively low economic status.

  • This group reports the lowest annual household income (just about $36,000).
  • It also reports the lowest percentage (15%) of people in this group with $50,000 in stock holdings.
  • It is also the youngest group, with an average age of 41. Only 28% of the people in this group are 50 or older, the lowest percentage of the five groups.
  • This group also shows the smallest percentage with a college education (14%).
  • It has the largest percentage of females -- 61%, compared with a national average of 52%.

The Worried Optimists (10%)

While members of this group are critical of current economic conditions and also express a high level of worry about the effects of the economy on their financial situation, they are the most optimistic of the five groups about the longer-term economic prospects.

  • They currently feel a high level of stress about the falling stock market (55% -- the second highest percentage).
  • Also, 73% say the economy can be described as either a crisis or a major problem.
  • Still, only 26% say the economy is in a recession, the lowest among the five groups.
  • On the positive side, 72% expect the economy to recover fully within two years, the highest percentage among the five groups.
  • In addition, 77% expect the Dow to reach the 11,000 mark again within two years, again the highest percentage among the five groups.

Political Orientation of the Five Groups

While only responses to the economic questions included in the poll were used to classify the respondents into the five groups outlined above, it turns out that the five groups also have quite distinctive political orientations. The two happiest groups, those with the fewest people worried about their economic situation, are disproportionately Republican. The two most worried groups consist of mostly Democrats. The cross-cutting group, the Worried Optimists, are about evenly divided politically -- giving a high approval rating to Bush, but indicating the country would be better of if the Democrats rather than the Republicans controlled Congress.

Economic Assessment Groups:
By Political Party
July 29-31, 2002

The party affiliation as shown in the preceding chart is reflected in each group's views on which party should control Congress. The Disconnected, and the Cool and Comfortable, groups both say the country would be better off if the Republicans controlled Congress -- by margins of 17 points and 22 points respectively. These results are not surprising, since both of those groups have substantial Republican majorities.

Similarly, among the Stressed Pessimists and Strugglers, which show large majorities in party affiliation for the Democratic Party, Democrats also fare much better than Republicans in the groups' assessments of which party should control Congress. Democrats win by 41 points among the Stressed Pessimists and 14 points among the Strugglers.

The smallest group, the Worried Optimists, split evenly between Republicans and Democrats as far as party affiliation is concerned. However, by a 10-point margin, this group says that the country would be better off with Democrats rather than Republicans controlling the Congress. At the same time, this groups gives an 86% approval rating to Bush -- the highest rating among the four groups. Clearly, this group is the most conflicted -- both in its political and economic attitudes.

The high correlation between people's views of the economy and party affiliation has been well documented in Gallup polling. When Democrat President Bill Clinton was in office, Democrats tended to give higher ratings of the economy than did Republicans. Now that Republican George W. Bush is president, Republicans tend to give higher ratings of the economy than do the Democrats. It is noteworthy, however, that this tendency to view the economy through partisan lenses is not shared by all Americans. Exceptions are numerous, as there are many Republicans who are worried about the economy and many Democrats who are generally satisfied. Thus, the last group of Worried Optimists may be the most intriguing of the five, as it illustrates how sharply conflicted some Americans can be when dealing with political and economic matters.

Survey Methods

The results reported here are based on telephone interviews with a randomly selected national sample of 1,003 adults, 18 years and older, conducted July 29-31, 2002. For results based on this sample, one can say with 95 percent confidence that the maximum error attributable to sampling and other random effects is plus or minus 3 percentage points. 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.

PROFILE OF CLUSTERS

DEMOGRAPHIC, POLITICAL AND ECONOMIC

 

What Me Worry? The Disconnected

(31%)

Cool and Comfortable

(23%)

Stressed Pessimists

(20%)

Strugglers

(16%)

Worried Optimists

(10%)

Demographics

% with Stock holdings of $50K +

 

22

 

47

 

36

 

15

 

36

Income (aver.)

$49.5K

$64.3K

$51.4K

$36.1K

$49.1K

Age (aver.)

48.1 years

47.0 years

45.8 years

41.1 years

45.6 years

Age (% 50+)

43

37

39

28

49

Gender

(% Female)

 

48

 

52

 

54

 

61

 

50

Education % College grad +

 

22

 

42

 

33

 

14

 

20

Political Orientation

Party

% Republican

54

57

24

32

48

% Democrat

34

35

63

46

48

Presidential Approval (%)

80

78

48

63

86

Likely vote in 2004

% Bush

58

65

24

40

55

% Democratic Candidate

26

27

56

36

35

Country better off if:

Republicans controlled Congress (%)

 

46

 

 

51

 

19

 

27

 

35

Democrats controlled Congress (%)

 

29

 

29

 

60

 

39

 

45

What Me Worry? The Disconnected

(31%)

Cool and Comfortable

(23%)

Stressed Pessimists

(20%)

Strugglers

(16%)

Worried Optimists

(10%)

Economic Attitudes

Economy: % Say Crisis or Major Problem

 

42

 

60

 

91

 

73

 

73

% Say economy is in a recession

 

28

 

43

 

82

 

54

 

26

% Say stock market fall shakes their confidence in U.S. economy

 

 

14

 

 

29

 

 

67

 

 

29

 

 

50

% Say stock market higher a year from now

 

 

61

 

 

72

 

 

44

 

 

43

 

 

73

% Say economy fully recover in two years

 

64

 

60

 

45

 

41

 

72

% Say DJIA will reach 11,000 within two yrs

 

57

 

57

 

52

 

46

 

77

% Concerned about direction Stock Market next year

 

 

39

 

 

71

 

 

88

 

 

61

 

 

85

Stock Market fall -- Impact on financial situation

% Say major

% Say minor

 

0

0

 

 

 

 

20

80

 

 

 

 

34

66

 

 

 

 

0

0

 

 

 

 

36

64

% Feel great deal or mod amount stress over stock market decline

 

 

13

 

 

28

 

 

68

 

 

22

 

 

55

What Me Worry? The Disconnected

(31%)

Cool and Comfortable

(23%)

Stressed Pessimists

(20%)

Strugglers

(16%)

Worried Optimists

(10%)

Worried:

You/spouse will lose job within a year

 

3

 

8

 

50

 

36

 

34

Not able to maintain standard of living

 

 

5

 

 

8

 

 

81

 

 

71

 

 

73

Not able to pay medical bills in next 12 months

 

11

 

6

 

58

 

58

 

63

Live less comfortably in retirement

 

6

 

15

 

85

 

72

 

77

Retire at later age due to SM decline

 

5

 

14

 

72

 

67

 

62

Cut back on spending

 

12

 

20

 

94

 

82

 

88

Less able to afford college education

 

8

 

12

 

68

 

67

 

62


Gallup https://news.gallup.com/poll/6607/Five-Different-Reactions-Economy-Among-Public.aspx
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