- Seven in 10 continue to say U.S. economy is in recession or worse
- Same level believe economic conditions are getting worse
- Six-month outlooks for economic growth, stock market relatively upbeat
WASHINGTON, D.C. -- Americans are concerned about the present state of the economy and believe conditions are worsening, but their six-month predictions for specific aspects of the economy are less dire -- particularly in terms of the stock market and economic growth.
|Total go up||Remain the same||Total go down|
|Net positive outlooks|
|Net negative outlooks|
|Gallup, April 14-28, 2020|
Americans Tilt Optimistic About GDP and Stock Market
When asked about the trend in economic growth over the next six months, 48% of Americans think it will go up by a lot or a little while slightly fewer, 42%, think it will go down.
The April 14-28 poll was conducted just prior to the Commerce Department's April 29 announcement that the GDP fell by 4.8% in the first quarter. That merely confirmed weeks of reports that the economic shutdown resulting from COVID-19 was throttling the economy. Thus, many Americans may assume the economy can only improve by the fall, especially if states have reopened.
The same poll finds 51% of Americans thinking the stock market will go up a lot or a little over the next six months, while 39% predict it will go down. At the time of the poll, the Dow Jones Industrial Average had recovered about half its losses from the sharp downturn in March, perhaps fueling this optimism.
Even as the jobs rate is soaring, Americans' outlook for unemployment tilts negative, but not by much. About half, 49%, say unemployment will go up over the next six months while 44% say it will go down.
With federal interest rates near zero and nowhere to go but up, 40% of Americans think interest rates will go up in the next six months; 32% say they will go down. Another 25% predict interest rates will stay the same, the largest "same" reading for any of the economic aspects rated.
The public is most pessimistic about inflation, with 56% predicting an increase compared with 20% expecting it to decline.
Seven in 10 Americans Troubled by Today's Economy
Americans' ratings of the economy in general, which had quickly soured in the first month of the coronavirus outbreak in the U.S. between mid-March and mid-April, have since held steady at the reduced level.
Just prior to the Commerce Department's April 29 announcement that GDP fell by 4.8% in the first quarter, 72% of Americans in a Gallup Panel survey said the U.S. economy is now in a recession (42%) or depression (30%). That is similar to the 71% recorded the week prior, but up slightly from 66% at the start of the month.
Americans also hold a decidedly negative view of the direction in which the economy is going. In the latest Gallup telephone poll, 71% said conditions are getting worse rather than better, similar to the 74% interviewed April 1-14, which were the worst readings in Gallup's trend since the Great Recession.
At the start of the coronavirus outbreak in March, Americans were still divided on whether the economy was getting better or worse, whereas in January and February, optimism still prevailed.
Americans have quickly come to recognize that not only is the economy headed in a negative direction, but the current economy is ailing. About four in 10 adults in each Gallup telephone poll this month have rated economic conditions as "poor," and another third have called them "only fair."
Meanwhile, the percentage saying the economy is in "excellent" or "good" condition has fallen to 23%, after plummeting from 54% in the first half of March to 27% in the first half of April.
While consumer optimism about the economy has plummeted since the start of the year amid low unemployment and record-highs in the stock market, Americans' ratings of the economy are not yet as negative as they were at their lowest in Gallup's trend.
In October 2008, at the start of the Wall Street economic crisis, only 5% of Americans rated the economy as excellent or good, 22% as only fair and 73% as poor.
And in June 2008, as the economic dark clouds leading up to that crisis were forming, 87% thought the economy was getting worse while just 7% said it was getting better.
The historical context thus suggests today isn't the worst of economic times in Americans' recent memory. On the other hand, it shows how much worse the public's mood can get. At the rate economic confidence declined in March, it could easily descend further in the coming months if bad news on unemployment and GDP continues to roll in.