PRINCETON, NJ -- The nation may be enjoying something of an inaugural bounce as net consumer ratings of the economy (the percentage rating the economy "excellent" or "good" minus the percentage rating it "poor") improved slightly to -48 points during the week ending Jan. 18, and to -45 during the three days surrounding the inauguration -- an improvement of 6 points from December's average of -51.
Consumer Expectations Improve a Little
Net consumer expectations for the future direction of the U.S. economy (the percentage saying economic conditions are "getting better" minus the percentage saying they are "getting worse") may also reflect something of an inaugural halo effect. Expectations have been at -62 for the last two weeks, but improved to -57 around the inauguration and now are 10 points better than December's -67 average.
There is not a lot to be happy about as far as the economy is concerned these days. The Federal Reserve is doing everything it can, not only to force interest rates lower but also to pump liquidity into the economy, including allowing the auto finance companies to become bank holding companies. Still, the reality on Main Street suggests the credit crunch continues. Further, even as the second half of the Troubled Asset Relief Program (TARP) money becomes available to the Treasury, the global banking system continues to crumble. And jobless claims continue to surge.
All of this continuing bad economic news seems to have been offset -- at least to a modest degree -- by the general national euphoria surrounding President Obama's inauguration. However, more important than the historic event itself may be the change in national and economic leadership associated with the new Obama administration that is taking power.
The extremely negative consumer mood of recent months is the result of not only the sharp deterioration of the real economy, but also a general loss of confidence in the nation's economic leadership. President Obama's economic team has a tremendous opportunity to restore Americans' optimism that the new financial capital of the world -- Washington, D.C. -- can get its act together and lead the nation out of the current economic morass.
Given the unbelievable downward spiral of the U.S. economy as reflected by the almost straight-line decline in Gallup's new hiring measure, the "honeymoon" for the new Obama economic team might be relatively brief. But if the downward spiral can be halted, the recent inauguration bounce seems to suggest that there are a lot of Americans ready to jump on the recovery bandwagon.
Gallup is interviewing no fewer than 1,000 U.S. adults nationwide each day during 2008 and 2009. The economic questions analyzed in this report are asked of a random half-sample of respondents each day. The results reported here are based on combined data of more than 8,000 interviews in August, September, October, November, and December 2008. For results based on this sample, the maximum margin of sampling error is ±1 percentage point.
The questions for the most recent two weeks of Jan. 5-11, and Jan. 12-18, 2009, are based on combined data of more than 3,000 interviews conducted weekly. For results based on these samples, the maximum margin of sampling error is ±2 percentage points.
The questions for the most recent three days of Jan. 19-21, 2009, are based on combined data of 1,440 interviews. For results based on these samples, the maximum margin of sampling error is ±3 percentage points.
Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).
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.