Economy

Three Years After Crisis, Little Sign of Economic Relief in U.S.

by Lymari Morales and Elizabeth Mendes

Economic confidence and consumer spending stuck in ranges seen in 2009

WASHINGTON, D.C. -- Three years after bankruptcy of Lehman Brothers jolted the U.S. economy into economic turmoil, job creation has rebounded from post-collapse lows, but economic confidence and consumer spending remain within the ranges seen in 2009. Gallup finds underemployment and unemployment essentially where they were a year ago.

Gallup Economic Metrics, January 2008-August 2011

Gallup has been tracking Americans' economic confidence, consumer spending, and employee reports about hiring and firing at their workplaces since 2008, and employment since January 2010, as part of its Gallup Daily tracking program. The findings in this analysis are based on monthly averages, based on approximately 15,000 interviews per month.

The measures provide Americans' ground-level reports of the impact of the economic events that have been unfolding around them, be it in their communities or workplaces or in the news.

Economic Confidence: Back at Recessionary Levels

Americans' confidence in the U.S. economy is now at its lowest point since February 2009 -- near the conclusion of the recession that officially ended in June 2009. Gallup's Economic Confidence Index was -52 in August, above its financial crisis lows, but much lower than the -21 to -35 range measured from June 2009 to June 2011.

The index saw sharp declines this year in April after the federal government nearly shut down amid budget negotiations, and in July and August after protracted negotiations that ultimately produced an agreement to increase the nation's debt ceiling.

Americans' current level of economic confidence -- which represents their views on the current state and future direction of the nation's economy -- is decidedly negative. Seventy-seven percent said the economy was getting worse in August, the highest -- by far -- since February 2009, the month in which Congress passed a $787 billion stimulus bill in hopes of lifting the U.S. economy out the depths of the recession. Americans' negativity about the future of the economy eased in March and lessened further in April of that year.

Job Creation: Improved From 2009-2010 Lows, but Far From Early 2008 Levels

The +13 Job Creation Index for August falls into the +10 to +15 range Gallup has measured since October 2010. The good news is that for nearly a year, Gallup has found consistently higher rates of net new job creation (the difference between hiring and letting go) than it did for the first two years after the global economic collapse. The not-so-good news is that the current rate of job creation is still just half of the +26 score Gallup found when it began tracking this metric in January 2008, when the nation was already technically in a recession.

Currently, 32% of workers say their employer is hiring and 19% say their employer is letting workers go, compared with 40% and 14%, respectively, in January 2008. Although the official recession, which began in December 2007, had not yet been declared, Gallup's job creation metric documented the stalling economy; the gap between hiring and firing narrowed from 26 percentage points in January 2008 to 19 points by August 2008. The gap moved into negative territory soon after the events of three years ago, with the nation's Job Creation Index score going from +16 in September 2008 to -1 in December 2008 and -5 by February 2009. It stayed negative or near zero through March 2010; after that, it began to sustain comfortable positive territory, climbing to double digits in October 2010 and staying there since then.

Underemployment and Employment: Stuck at Year-Ago Levels

Gallup found 18.5% of workers underemployed, including 9.1% unemployed, in August 2011. These figures are based on Gallup's measure of employment, which is not seasonally adjusted. Both of the current figures are statistically similar to what they were a year ago, meaning the employment situation in the U.S. is no better now than it was at that time.

Gallup's trend dates back to January 2010, so Gallup cannot say definitively how its latest numbers compare to what they would have been before the global economic collapse. However, comparisons with January 2010 reveal that the trajectory is neither linear nor positive. At that time, Gallup found 19.9% of workers underemployed and 10.9% unemployed. The current figures are slightly improved from then, but underemployment is significantly higher than the 17.2% recorded in November 2010 and unemployment is significantly higher than the 8.7% recorded as recently as June 2011.

Consumer Spending: Nowhere Near 2008 Levels

Americans' spending has remained essentially stagnant since it fell dramatically in January 2009. Spending in stores, restaurants, gas stations, and online has averaged $66 per day so far in 2011 -- similar to the $65 is 2010 and $64 in 2009. This compares with an average of $96 per day in 2008. That year, Americans' daily spending ranged from $81 to $114 per day in monthly averages. Since 2009, monthly spending averages have ranged between $58 and $75.

Bottom Line

Gallup's key economic metrics document the ups and downs of the U.S. economy over the past three years from the perspective of average American consumers and workers. The findings showcase that recovery is far from reality in terms of economic confidence, job creation, employment, and consumer spending. Among these measures, only job creation has measurably improved from 2009 levels and it still has far to go before it reaches 2008 levels. Gallup's continuous measurement of these metrics will provide daily, weekly, and monthly updates on consumers' and workers' states of mind and on the state of the workforce as the U.S. economy continues its attempts to achieve a sustained economic recovery.

Gallup.com reports results from these indexes in daily, weekly, and monthly averages and in Gallup.com stories. Complete trend data are always available to view and export in the following charts:

Daily: Employment, Economic Confidence and Job Creation, Consumer Spending
Weekly: Employment, Economic Confidence, Job Creation, Consumer Spending

Read more about Gallup's economic measures.

View our economic release schedule.

Survey Methods

Results for Gallup's economic confidence and consumer spending measures are based on Gallup Daily tracking interviews with approximately 15,000 national adults each month, aged 18 and older. Results for Gallup's underemployment and unemployment measures are based on interviews with approximately 15,000 American workers each month, aged 18 and older. Results for Gallup's job creation measure are based on interviews with approximately 15,000 U.S. employees each month, aged 18 and older. For these samples, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage point.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2010 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.

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.

For more details on Gallup's polling methodology, visit www.gallup.com.


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