Two years after the official start of the recovery, the American people remain pessimistic about their current economic circumstances and longer-term prospects.
Fewer than a quarter of people see signs of improvement in the economy, and two-thirds say they believe the country is on the wrong track overall, according to a Bloomberg National Poll conducted June 17-20.
“Gas prices are higher, grocery prices are higher, transportation prices are higher,” says poll respondent Ronda Brockway, 54, an insurance company manager and political independent who lives in a suburb of Harrisburg, Pennsylvania. “The jobs situation nationwide is very poor.”
By a 44 per cent to 34 per cent margin, Americans say they believe they are worse off than when President Barack Obama took office in early 2009, when the US was in the depths of a recession compounded by the September 2008 financial crisis and the economy was losing as many as 820,000 jobs a month.
The gloom covers the immediate future, with fewer than 1 in 10 people expecting unemployment to return to pre-recession levels within the next two years, and it extends to the next generation. More than half of respondents say their children are destined to have a lower standard of living than they do, upending a traditional touchstone of the American Dream.
HIGHER THAN REAGAN
The portion of Americans who say they believe the US is on the wrong track is higher than it was at any point during Ronald Reagan’s presidency, when unemployment peaked at 10.8 per cent after the 1981-82 recession, according to an ABC News/Washington Post poll. The ABC poll showed the wrong-track number during Reagan’s first term peaking at 57 per cent in October 1982. The Bloomberg poll shows 66 per cent of Americans think the US is going in the wrong direction now.
As the public grasps for solutions, the Republican Party is breaking through in the message war on the budget and economy. A majority of Americans say job growth would best be revived with prescriptions favored by the party: cuts in government spending and taxes, the Bloomberg Poll shows. Even 40 per cent of Democrats share that view.
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“Unless you limit the actual money coming in to the government and give businesses a break, I don’t think you’re going to have a bounce-back in the economy,” says poll respondent Michael Jefferys, 37, a business analyst for a building supply manufacturer. The economy “is at a teetering point: Depending on what changes are made, it could take a dramatic fall or start to revive,” says Jefferys, a political independent who lives in Pitman, New Jersey.
BETTER VISION
Even so, the public remains ambivalent about the Republican Party’s economic stewardship. Asked to rate Obama’s vision for the economy against that of the Republicans, poll respondents favour the president’s by 40 per cent to 37 per cent, though that is a deterioration from a 12-percentage-point advantage Obama maintained three months ago.
The souring public mood comes as the economy has been buffeted by a heightened sense of crisis over European sovereign debt, manufacturing supply disruptions in the aftermath of the Japanese earthquake, and rising gasoline prices during the early months of the year.
Following a string of disappointing data in recent weeks, a number of economists have lowered their growth forecasts for the current quarter and remainder of the year. The median forecast for second-quarter growth among economists surveyed by Bloomberg dropped from 3.3 per cent in May to 2.3 per cent in June.
EARNINGS DOWN
The buying power of Americans’ wages is declining at the fastest rate since 2008, with real average hourly earnings down 1.6 per cent during the 12 months ended in May. Job growth also has slowed, and the unemployment rate in May reached 9.1 per cent, the highest level so far this year.
Other data point to progress over the past two years, including seven consecutive quarters of economic growth and a more than 50 per cent rise in the Standard & Poor’s 500 stock index during Obama’s presidency.