GALLUP NEWS SERVICE
PRINCETON, NJ -- There has been some mixed economic news in recent weeks. The price of gasoline has sharply receded from the $3.00 a gallon range reached just a few months ago, and the Dow Jones average is up and closing in on an all-time high. At the same time, Ford Motor Company announced a major restructuring that may result in the loss of tens of thousands of jobs and the elimination of the company's dividend.
How is all of this playing out in the minds of Americans? Gallup's monthly update on consumer evaluations of the nation's economy for September finds little evidence of a significant change from the generally negative levels observed over the last several years. Perceptions about the job outlook are slightly better than those for the economy more generally, and are as positive as they have been over the last several years, but the majority of Americans still say that now is not a good time to look for a quality job.
Overall economic assessment
The percentage of Americans who are classified by Gallup as economically "negative" is now at 54%. That is statistically the same as measured in each of the three preceding months -- and for most of the months this year before that, except for May.
The broad trend this year on this measure can be looked at as consisting of four periods: a relatively more positive sentiment as the year began in January, an increasingly negative sentiment from January through April, a quite negative sentiment in May, and a return to March and April levels for the summer months and September. This positive/mixed/negative classification is based on Americans' responses to two questions asking about assessments of the current economy and projections about the direction of the economy going forward. The data for each of these two questions will be discussed independently below.
Just as consumer attitudes peaked more negatively in conjunction with the sharp rise in gas prices in May, it could be expected that sentiment might fall concurrently with the sharp drop in prices now. But the Sep. 7-10 survey does not reflect such an uptick in positive assessments, at least from a broader perspective. The current 54% negative is no better than what was measured in prior months going back to March, with the exception of August, when there was a slightly more negative reading of 58% negative. It will be important to monitor these measures in the months to come to see if the public is perhaps going to have a more delayed reaction to the drop in the price of gas (assuming that it continues) and/or improvements in the stock market.
Of interest in the current political environment, is the continuation of sharp differences in consumer outlook by political orientation:
Republicans are much more likely to be positive about the economy than are independents or in particular Democrats, 75% of whom are negative.
Although there are socioeconomic differences in partisan groups that help explain some of these differences (Republicans have higher incomes than either of the other two political groups), past research has shown that one's orientation toward the party in control of the White House deeply colors one's views of the economy. Democrats were more positive than Republicans about the economy while Bill Clinton was in office, and if a Democrat takes over the presidency after the 2008 election, Republicans' attitudes about the economy will no doubt become suddenly much less positive.
Assessment of Current Economic Conditions
This graph displays the trend over the last year and a half in Americans' assessments of current economic conditions.
Americans were most positive in early 2005, and again in early 2006, and most negative in the fall of 2005, and again this spring. But the current 34% of Americans who rate the economy as excellent or good is generally typical of what has been found all year.
Importantly, the trend shows no sustained change in these measures in recent months.
Economic Outlook
Americans' prognostications about the direction of the economy are somewhat more subject to short-term change than their assessment of current conditions.
Since January 2005, the percentage of Americans who believe the U.S. economy is getting better has ranged from 48% down to a low of 22% last month. The current 31% reading on this optimism measure is certainly better than last month's reading, but is still lower than the levels found at the end of 2005, and early 2006.
It is too soon to tell if the modest uptick since last month is the beginning of a more sustained trend, or simply a return to the levels of earlier this year.
Job Outlook
Forty-one percent of Americans currently say that it is a good time to find a "quality job," while 54% say it is a bad time.
The broad trend on this measure shows a slight increase in positive perceptions over the last year and a half, although the current ratings are quite similar to what has been found over the last 10 months or so.
In other words, there has been no sharp change in the public's perception of the job market in either direction in recent months.
Survey Methods
The latest results are based on telephone interviews with a randomly selected national sample of 1,002 adults, aged 18 and older, conducted Sep. 7-10, 2006. For results based on this sample, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3 percentage points. 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.
