PRINCETON, NJ -- Americans have become even more deeply pessimistic about the economy than they have been in recent months. Almost 8 out of 10 now say that economic conditions in the United States are getting worse, the highest such level of pessimism since Gallup began asking the "getting better"/"getting worse" question in this format in 1991. Only about a quarter of Americans rate the current economy as excellent or good, and over half say now is not a good time to be looking for a quality job.
According to Gallup's November update on the economy (based on the results of a survey conducted Nov. 11-14), 27% of Americans rate current economic conditions as either "excellent" or "good," while 44% say they are "only fair" and 28% say they are poor.
This assessment is down slightly from last month, and is considerably lower than economic ratings as the year began. In January, 52% rated the economy as excellent or good.
Americans' appraisal of current economic conditions -- while low -- is not as low as it has been at other points this decade. At one point in 2003, for example, just 18% rated the economy as excellent or good. The all-time low point on this measure is 10% excellent or good measured in August and September 1992.
Optimism and Pessimism
Americans' negative mood about the economy is most evident when they are asked this question: "Right now, do you think that economic conditions in the country as a whole are getting better or getting worse?"
An extraordinary 78% of Americans now say the economy is getting worse, while a scant 13% say it is getting better. Gallup has been asking this question since 1991, and these are the most negative responses Gallup has ever recorded.
The most negative measure on this question prior to this poll was recorded in August of this year, when 72% said the economy was getting worse. Back in January 1992 -- the year incumbent president George H. W. Bush was denied his bid for re-election, in large part because of perceptions of a bad economy -- 71% said the economy was getting worse.
The Job Market
There are a number of proximate and probable causes for Americans' deep economic pessimism, including the recent drop in the stock market, the subprime mortgage crisis that has roiled the housing market, and the rapidly increasing price of gas. Americans also appear to be concerned about the job market.
Only 38% of Americans say now is a good time to find a quality job, while 55% say it is not. This is roughly in line with what Gallup has found over the past two months, and down from more positive views of the job market earlier in the year.
The low point on this measure since Gallup began asking it regularly in 2001 has been 16%, measured in March 2003.
The American public is highly pessimistic about the direction of the U.S. economy at this point in time -- in fact, as pessimistic as Gallup has measured over the past 16 years during which this particular measure has been in use.
There are several possible implications of this high level of pessimism. Clearly there is concern about how worries about the economy will affect consumer spending, although Gallup's initial projections of holiday spending this year do not indicate a sharp drop-off -- at least not as of this point in the shopping cycle.
There are also definite political implications. The party in control of the White House is usually held accountable for a poor economy at the time of a presidential election. Both Jimmy Carter and George H. W. Bush were defeated in their bids for re-election to a significant degree as a result of a negative economic environment. The current President Bush cannot run for re-election, of course, but some have concluded that his party will suffer next November for the same reason. If Americans are highly disgruntled with the economy at this time next year, it is reasonable to expect that the Republicans will have a difficult time holding on to the White House. More generally, these data suggest that the economy has the potential to play an important role in deciding the outcome of next year's presidential vote.
These results are based on telephone interviews with a randomly selected national sample of 1,014 adults, aged 18 and older, conducted Nov. 11-14, 2007. For results based on this sample, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±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.