GALLUP NEWS SERVICE
PRINCETON, NJ -- Already scarce consumer optimism about the U.S. economy tumbled further in March, and according to a new Gallup poll, that optimism remains at the new reduced level in April. At the same time, perceptions of current economic conditions are restored to where they stood in February. Nevertheless, both measures continue to reveal a gloomy economic mood across the country.
And this was before Tuesday's unwelcome economic news reports about the outlook for home prices in 2007 and the minor stock market slump.
According to the April 2-5, 2007 poll, solid majorities of Americans consider the nation's economic picture to be less than good and perceive it to be getting worse.
Economic Outlook
Only 29% of Americans believe the economy is getting better; 60% say it is getting worse. Gallup saw optimism on this measure fall from 38% in February 2007 to 28% in March -- the largest one-month decline seen in more than three years. Today's 29% figure is similar to the low levels of consumer optimism recorded last spring and summer, though still higher than the 22% recorded in August 2006.
A majority of Americans have not felt optimistic about the direction of the economy since July 2004, and not for any sustained period since 2000.
Current Economic Conditions
Public evaluations of current economic conditions also fell earlier this year, from 52% in January, to 43% in February, to 38% in March. However, this partly rebounded to 43% in the latest poll and, as a result, the current economic assessment is better than it was last spring and summer.
Americans Divided on Jobs Outlook
Americans are about equally divided over whether now is a good time or a bad time to find a quality job. This assessment of the job market has been in place since January, but represents improvement over 2006 when the majority of Americans were generally negative about the employment sector.
The recent improved readings on employment are likely to only get better, given the government's April 6, 2007 report showing higher-than-anticipated growth in jobs in March, and a corresponding decline in unemployment.
While it is encouraging that public sentiment about current economic conditions is holding firm, one concern is that lack of optimism about the direction of the economy could eventually drag these ratings down as well. Gallup attributed the 10-point decline in optimism in March to a variety of factors, including the stock market slides of Feb. 28 and March 13, a roughly 30-cent increase in average gas prices over that period, and discouraging news from the housing market. (See "Consumer Optimism Slumps in March" in Related Items.)
The latest news out of the housing market -- that average home prices are expected to decline for the first time in at least 40 years -- and continued shakiness in the stock market could work against consumer confidence. Whether the strength of the jobs market offsets that remains to be seen. Also, while gas prices will continue to experience a seasonal increase through the spring, experts predict that the average price of gas in 2007 will be about 11 cents lower than last year.
Trends in Optimism
Last month, Gallup noted that the decline in Americans' optimism about the economy was seen across all major segments of society, but was particularly steep among Republicans and those living in the eastern and western sections of the country.
The March findings are generally confirmed in the latest poll. Whereas 62% of Republicans in February believed economic conditions were improving, this dropped to 46% in March, and remains at about that level (44%) in April.
Between February and March, Gallup recorded double-digit declines in economic optimism among residents of the East (down 15 points) and West (-13). The downturn was slightly less pronounced in the Midwest (-8) and South (-7). The April survey shows optimism partially restored in the East, but remaining at the March levels in the three other regions.
Survey Methods
Results are based on telephone interviews with 1,008 national adults, aged 18 and older, conducted April 2-5, 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.
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