Just 4 in 10 Americans Say Recession Is Likely Next Year

PRINCETON , NJ -- Recent negative economic news -- including the housing slump, problems in the mortgage industry, the weak dollar, and record-high oil prices -- are leading some economists to predict the country will be facing a recession, or decline in the country's gross domestic product, in the near future. However, no one has declared that the United States is currently in a recession, as the latest government statistics released Wednesday show that the nation's economy actually grew by 3.9% in the third quarter of 2007.

A recent USA Today/Gallup poll gauged public opinion on the topic of an economic recession and found just 4 in 10 Americans saying an economic recession is likely within the next 12 months. That is on the low end of what Gallup has measured during other uneven economic times since the early 1990s. In a separate question, roughly one in three Americans say they believe the economy is currently in a recession. Democrats and those residing in lower-income households are particularly likely to believe the economy is currently in a recession and that there will be a recession during the next 12 months.

The Oct. 12-14, 2007, poll asked a random half of the sample whether they thought the economy was likely to go into a recession in the next 12 months; the other half of the sample was asked whether they believe the economy is currently in recession.

Do Americans Believe There Will Be a Recession in the Next Year?

Just 40% of Americans say it is "very" (13%) or "fairly" (27%) likely that there will be a recession in the country during the next 12 months. The majority, 57%, says this is "not too" (45%) or "not at all" (12%) likely.

Historically, Gallup has asked this question on an irregular basis, mostly during uneven economic times when a recession seemed a possibility. The current results show a more optimistic public than what Gallup has measured in the past.

Gallup tracked this measure in the late summer of 1990 through the end of the year, when there was some concern that an economic slowdown was in the offing. Over that period of time, a strong majority of Americans -- between 65% and 78% -- said the economy would likely enter a recession. Indeed, the U.S. economy was in a recession from mid-1990 to early 1991. In late 2000, after the dot-com bubble had burst, 45% of Americans believed there would be a recession during the next year. This sentiment inched up to 53% in February 2001 and then declined modestly to 49% in March 2001. The U.S. economy entered a recessionary period that same month.

How likely do you think it is that there will be a recession in the country during the next 12 months -- very likely, fairly likely, not too likely, or not at all likely?

When asked if they think the economy is currently in a recession, 36% of Americans say it is in a recession, while the majority, 58%, say it is not.

Gallup has asked this question from time to time going back to the early 1990s, again typically during uncertain economic times. Most Americans agreed that the economy was in a recession in 1991, and continued to do so as the economy began to improve in 1992. In late 1993 and early 1994, most came to believe the economy was no longer in a recession. The historical high point for this measure was an 84% reading in January 1992.

Gallup started tracking the measure much more frequently in early 2001, at the end of the dot-com boom when the U.S. economy started to shrink and the nation’s economy was in a recession for about eight months. The public's perception that the economy was in a recession was lower in the early months of the year, between 31% (the historical low) and 44% from February to April 2001, and then rose toward the end of that year, reaching 59% in November, following the 9/11 terrorist attacks. In 2002 and 2003, the percentage saying the economy was in a recession showed some fluctuation, with between 41% and 56% saying it was in a recession across various polls. By January 2004, only 32% of Americans believed the economy was in recession.

Democrats, Lower-Income Earners More Likely to Say Country in a Recession

Americans' perceptions that the economy is currently in a recession, or is likely to enter a recession in the next year, are related to household income and partisanship.

Democrats (including independents who lean to the Democratic Party) are much more likely than Republicans (including leaners) to say the economy is currently in a recession, and to say the country will be in recession over the next 12 months.

These partisan differences are not necessarily new. Democrats were more inclined than Republicans to say the country was or would be in a recession the last time Gallup asked these questions, in 2004 and 2001, respectively. This likely results from the fact that a Republican president occupies the White House, and supporters of the opposition party generally tend to rate conditions in the country as much worse than supporters of the president’s party do. Democrats have consistently rated the economy much more negatively than Republicans during the Bush administration.

Americans residing in lower-income households are much more likely than those in higher-income households to say the country is in or is facing an economic recession.

Results are based on telephone interviews with 1,009 national adults, aged 18 and older, conducted Oct. 12-14, 2007. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.

For results based on the 507 national adults in the Form A half-sample and 502 national adults in the Form B half-sample, the maximum margins of sampling error are ±5 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.

(BASED ON 507 NATIONAL ADULTS IN FORM A)

13. (Asked of a half sample) Do you think the economy is now in a recession, or not?

(BASED ON 502 NATIONAL ADULTS IN FORM B)