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In U.S., Cautious Optimism About Economy in Year Ahead

In U.S., Cautious Optimism About Economy in Year Ahead

Most expect economy to get better, but not be fully recovered

PRINCETON, NJ -- Most Americans, 65%, expect the economy to improve over the next year -- but only 2% think it will fully recover. Twenty-three percent expect the U.S. to still be in a recession, and 12% expect conditions to get worse than they are now.

A Year From Now, Will the Economy Be Fully Recovered, Better Than Now, Still in Recession, or Worse Than Now?

The vast majority of Americans, 84%, believe the economy is currently in a recession, according to a Sept. 11-13 USA Today/Gallup poll. Gallup has updated this measure periodically since 1991. The 84% who now view the economy as in a recession ties the previous high Gallup measured in January 1992, and is much higher than what Gallup found in the last recession, in 2001.

Do You Think the Economy Is Now in a Recession, or Not?

There is widespread consensus on this, and little difference by political party affiliation -- 85% of Republicans, 86% of independents, and 82% of Democrats believe the economy is in a recession.

"The poll finds that 61% of Americans are worried that an economic crash is still possible, including 20% who are very worried."

Political differences are more apparent in predictions about where the economy is headed over the next 12 months, but at least half of all three major political party groups expect the economy to be better than it is now. There is much more agreement among Democrats (85%) than among independents (57%) or Republicans (50%) that the economy will improve.

Views of U.S. Economy One Year From Now, by Party ID

These differences likely reflect the fact that the Democratic Party is in charge of the federal government and is pursuing economic policies it favors. When asked what impact Barack Obama's policies have had on the economy, three in four Democrats say these have made the economy better, but the majority of Republicans, 54%, say his policies have made the economy worse.

Views of Effect of Obama's Economic Policies on U.S. Economy, by Party ID

Overall, Americans give Obama's policies a more favorable than unfavorable review -- 43% say his policies have made the economy better; 25% believe they have made it worse; and 30% believe they have not made a difference.

Not Completely out of the Woods?

A year ago, concerns about the financial crisis caused many political and economic leaders to predict that the economy could collapse without swift and significant government action. In early October, Congress finally agreed to a financial industry bailout bill, which President Bush signed.

Though the bailout legislation has been criticized, the economic collapse some feared never materialized. But given the economy's current fragile state, there is no guarantee that a collapse will not come. The poll finds that 61% of Americans are worried that an economic crash is still possible, including 20% who are very worried.

Worry About an Economic Crash in U.S. Within the Next Year

Whereas 69% of Republicans and 66% of independents are at least somewhat worried about a potential crash, only 49% of Democrats share this level of concern.

Bottom Line

Americans believe the economy is still in poor shape, but are cautiously optimistic about the next 12 months. Most think the economy will be better a year from now than it is currently, though few go as far as to say it will be fully recovered.

Though Americans do not express a high level of concern that the economy will go in the other direction toward a collapse, a majority are at least somewhat worried that this could occur.

Survey Methods

Results are based on telephone interviews with 1,030 national adults, aged 18 and older, conducted Sept. 11-13, 2009. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 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.

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