Gas, Jobs, Inflation: Consumers' Top Complaints About U.S. Economy

by Lydia Saad

Economic optimists cite jobs as the primary sign of economic improvement

GALLUP NEWS SERVICE

PRINCETON, NJ -- Public optimism about the U.S. economy has been in decline since last fall, dipping to the point where only 23% said the economy is getting better in a mid-June Gallup poll. The question is, why? The latest Gallup Panel survey helped provide an answer by asking respondents who say the economy is either getting better or getting worse to identify the economic indicators they feel support their position.

Soaring gas prices, unemployment, and rising inflation are the top reasons given by those perceiving an economic downturn. High employment and a healthy stock market are the leading signs behind the views of those who believe the economy is improving. Employment is as a major factor on both sides of the perceptual divide, but it is a much stronger element for those saying the economy is improving.

Evidence for Economic Decline

According to the June 25-28, 2007, survey, there are three major economic negatives on the minds of those who think the economy is souring. These are high gas prices (named by 31% of those accorwho say the economy is getting worse); the job market, including unemployment, layoffs, and outsourcing (30%); and inflation, including rising prices, generally, and the high price of food and groceries (30%). Additionally, concerns about the housing market, including sluggish sales and home foreclosures, are cited by 22% of those perceiving an economic downturn.

When calculating the total mentions for unemployment, inflation, and housing, Gallup counts respondents who name two or more related issues only once, producing a "net" total for each category.

Other negative signs named by at least 5% of Americans who consider the economy to be getting worse include the federal budget deficit (10%), healthcare costs (9%), the growing gap between the rich and the poor or middle class (6%), and stagnant wages (5%). (Detailed results showing all responses are provided in the tables at the end of this report.)

There are some notable distinctions in perspective on this question across different geographic regions. Residents of the South and West are especially concerned about gas prices. Those in the Midwest are the most likely to mention job losses and unemployment while those in the West are least likely to mention this. The housing market and foreclosures are of particular concern in the West.

Leading Geographic Differences in Perceptions
of Why Economy Is Getting Worse

June 25-28, 2007

East      

Midwest     

South     

West     

%     

%     

%     

%     

Gas prices     

23     

23     

36     

40     

Unemployment     

30     

35     

23     

17     

Housing market     

16     

13     

14     

26     

Home foreclosures     

5     

6     

4     

12     

The evidence given for believing the economy is getting worse also differs according to household income -- particularly with respect to the housing market (mentioned most frequently by upper-income Americans) and grocery prices (more widely cited by lower-income Americans).

Leading Household Income Differences in Perceptions
of Why Economy Is Getting Worse

June 25-28, 2007

$75,000+

$35,000 to
$74,999

Less than
$35,000

%

%

%

Housing market

30

14

9

Food/grocery prices

6

11

14

Evidence for Economic Improvement

For the much smaller group of Americans who believe the economy is improving, the dominant factor appears to be the job market. A net total of 44% of economic optimists cite either low unemployment or the availability of jobs as the main sign the economy is improving. Secondarily, 28% mention the strength of the stock market or Wall Street.

Seventeen percent of economic optimists see the continued rise in consumer spending as a positive sign for the economy.

In direct contrast to the 22% of economic pessimists who cite high inflation as evidence the economy is worsening, 14% of economic optimists cite stable inflation as evidence the economy is improving.

Interest rates -- cited by 10% of optimists compared with 4% of pessimists -- are a somewhat greater factor in the perception the economy is improving. Other signs named by at least 5% of optimists are that business is doing better (10%), the housing market is picking up (9%), and that gas prices are coming down (6%).

Bottom Line

Consumer confidence has been in short supply for most of the past six years, with the occasional rebounds lasting only a few short months before they switch course. Economic pessimists have outnumbered optimists continually for more than two years, but the percentage saying the economy is getting worse is now among the highest levels Gallup has seen in monthly tracking since January 2001.

According to the new survey, there is no dominant reason for Americans' believing the economy is getting worse -- but the reasons do tend to cluster into several major categories. Gas prices and inflation are particularly associated with negative views of the economy. The job market is seen as a major negative factor among economic pessimists, but it is even more likely to be cited as a positive factor among economic optimists. Weaknesses in the housing market, federal budget deficit, healthcare costs, and wage inequality figure as relatively minor factors for Americans convinced that the economy is suffering.

Survey Methods

Results for this panel study are based on telephone interviews with 1,014¬†national adults, aged 18 and older, conducted June 25-28, 2007. Respondents were randomly drawn from Gallup's nationally representative household panel, which was originally recruited through random selection methods. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ¬Ī3 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.

3. Right now, do you think the U.S. economy as a whole is getting better or getting worse?

(Results not shown; asked for screening purposes only.)

4. (Asked of those who say the U.S. economy as a whole is getting better) What are some of the signs that you have seen, heard, or read about that indicate to you that the U.S. economy is getting better? [PROBE: Any others?] [OPEN-ENDED]

BASED ON 335 ADULTS WHO SAY THE U.S. ECONOMY IS GETTING BETTER



2007
Jun 25-28

%

Stock market/Wall Street/Investments doing well

28

Low unemployment/unemployment down

24

Job growth/more jobs available

23

Consumer spending up

17

Inflation stable/under control

14

Business doing better

10

Interest rates low/stable

10

Housing market picking up

9

Gas prices coming down

6

More construction

3

 

Other

4

Nothing in particular (vol.)

5

No opinion

4

 

(vol.) = Volunteered response

Note: Percentages add to more than 100% due to multiple responses.

5. (Asked of those who say the U.S. economy as a whole is getting worse) What are some of the signs that you have seen, heard, or read about that indicate to you that the U.S. economy is getting worse? [PROBE: Any others?] [OPEN-ENDED]

BASED ON 554 ADULTS WHO SAY THE U.S. ECONOMY IS GETTING WORSE

2007
Jun 25-28

%

High gas prices

31

Job losses/layoffs/unemployment

26

Inflation/cost of living going up/rising prices (non-specific)

22

Housing market slow

17

High food/grocery prices

10

Federal budget deficit/national debt

10

Healthcare costs

9

Home foreclosures/people losing homes/subprime mortgages

6

Growing gap between rich and poor/middle class

6

Outsourcing of jobs

5

Wages stagnant

5

Interest rates going up

4

Illegal immigration

4

Overseas competition

3

Stock market is down

2

 

Other

13

Nothing in particular (vol.)

1

No opinion

1

 

(vol.) = Volunteered response

Note: Percentages add to more than 100% due to multiple responses.

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