Consumer Optimism Slumps in March

GALLUP NEWS SERVICE

PRINCETON, NJ -- A new Gallup Poll finds the percentage of Americans believing the economy is getting better now a meager 28%, down from 38% in early February. At the same time, positive evaluations of current economic conditions have declined slightly over the past month from 43% in February to 38% today. Public perceptions of the job market -- with Americans about equally divided over whether now is a good time or bad time to find a quality job -- are unchanged.

With a shrinking minority of Americans saying economic conditions are getting better, about 6 in 10 (62%) now say they are getting worse.

Public optimism about the economy has not been this low since last August, and the latest 10-point decline represents the largest one-month drop in confidence that Gallup has recorded in more than three years. 

The unusual steepness of this decline suggests it is linked to something equally dramatic -- such as the mega slides of the U.S. stock markets on Feb. 27 and March 13. However, other factors could include the roughly 30-cent increase in average gas prices over the past month, and discouraging news out of the housing market with recent reports of slow sales, declining prices, and a record number of foreclosures in the pipeline.

(Notably, Gallup finds no change in March over February in the percentages of Americans mentioning any of these specific issues when asked to name the most important problem facing the country.)

As for current economic conditions, only 38% of Americans say the economy is in either excellent or good shape; 47% say conditions are only fair, while 15% say they are poor.

Split Decision on the Job Market

Americans are slightly more optimistic when it comes to the job market: 45% say it is a good time to find a quality job right now, while nearly half (49%) say it is a bad time. These results are nearly identical to those in February and are slightly more positive than in 2006, when an average of 41% considered it a good time to find a quality job.

The more recent optimism about the job market aligns with a positive employment report from the Labor Department for February, showing that unemployment fell slightly and average hourly wages grew.

Majority Have Negative Combination of Economic Views

Combining Americans' current ratings of the economy with their economic outlook reveals that a majority of the public (52%) is solidly negative about the economy today. These individuals describe current conditions as only fair or poor, and predict the economy will either worsen or remain poor. Less than half that number (23%) are uniformly positive about the economy, saying current conditions are excellent or good, and believing the economy will stay that way or improve. The remaining 25% express a mixed set of views or are unsure.

Given the declines in Gallup's current economic conditions and economic outlook measures over the past month, the percentage of Americans classified as "positive" about the economy has declined from 31% to 23%, while the "negative" sector has increased from 45% to 52%. The public's overall economic attitudes have not been this weak since September 2006.

Republican Optimism Wanes

The decline in economic optimism recorded this month is seen across all major segments of society, but is particularly steep among Republicans and those living in the eastern and western sections of the country.

Whereas a 62% majority of Republicans in February believed economic conditions were improving, only 46% feel this way today. A third of independents and a quarter of Democrats anticipated economic improvement in February, but these levels dropped by 10 to 11 points in March.

Gallup recorded double-digit declines in economic optimism among residents of the East (down 15 points) and West (-13) over the past month. The downturn was slightly less pronounced in the Midwest (-8) and South (-7).

Survey Methods

Results are based on telephone interviews with 1,009 national adults, aged 18 and older, conducted March 11-14, 2007. 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. 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.