Gallup's Daily tracking shows a sharp increase in the percentage of Americans saying the economy is "getting worse" over the past several months. In particular, 80% of upper-income Americans said the economy was "getting worse" in August -- even higher than the 77% of other Americans.
This pessimistic trend is consistent with recent economic reports showing retail sales were flat, no net new jobs were created, and manufacturing activity slowed last month. Worse, both this level of pessimism, and the fact that upper-income consumers were more negative than their middle- and lower-income counterparts, hearkens back to the days of recession and financial crisis in late 2008 and early 2009.
In early September, Gallup data shows Americans became slightly less pessimistic following the Labor Day holiday, the president's jobs proposal, and a surge on Wall Street as major central banks announced they would provide liquidity to major European banks.
Regardless, the overwhelming majority of Americans may be right -- the U.S. economy may not just be stagnating -- but instead "getting worse" with another recession possible. Given the seeming political deadlock concerning fiscal policy, this makes the Fed meeting this week a potential pivotal point in the future course of the economy.