Pessimism about near-term inflation falls, but pessimism about near-term unemployment rises
PRINCETON, NJ -- Fifty-seven percent of Americans anticipate unemployment will go up over the next six months -- a higher percentage than in recent years. On the other hand, the 58% of Americans who expect higher inflation rates is down significantly from recent years.
Many Americans Expect Higher Prices
Possibly as a result of increasing gas and food prices, or even as a result of the significant increase in federal deficit spending, many Americans anticipate that inflation rates will go up over the next six months. Still, the 58% of Americans currently voicing concerns about increasing inflation is less than the 63% holding a similar view about two years ago and much less than the 74% of May 2005.
Many Also Think Unemployment Will Go Up
Given the depths of the current recession, it is not surprising that 57% of Americans expect unemployment to increase over the next six months. In fact, the current number of people expecting increased net job losses is much higher than the 40% of July 2007 or the 41% to 46% reported in May of each year from 2002 to 2005.
One possible interpretation of Americans' stated expectations for higher inflation and higher unemployment over the next six months might be stagflation -- a period when the economy exhibits little real economic growth but consumer prices continue to increase. Given the decline of 5.5% in the GDP for the first quarter of 2009 and the continued increase in gas prices at the pump, this could be a reasonable expectation.
Gallup's daily economic data continue to show job loss exceeding job creation, aligning with recent jobless claim trends, and supporting consumer expectations that unemployment will continue to increase in the weeks and months ahead. And while it is possible that market distortions will allow gas prices to continue to surge even as economic growth improves but remains anemic, it is hard to see such prices holding up as consumer spending continues to wither. On the other hand, recent experience suggests that energy and other commodity prices may no longer be linked to consumer demand -- at least, not to the degree they have been in the past.
Results are based on telephone interviews with 1,015 national adults, aged 18 and older, conducted May 29-31, 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 ±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.