March 16, 2009

Obama’s Approval Rating Slips Amid Division Over Economic Proposals

Section 4: Economic Outlook

National Economic Ratings

The public continues to offer a bleak assessment of current national economic conditions. Nearly seven-in-ten (68%) rate the economy as poor while an additional 25% say the economy is in only fair shape. Just 6% call economic conditions good and fewer than 1% (3 of 1,308 adults interviewed) say conditions are excellent. Ratings of the national economy are nearly identical to those given a month ago and they are more negative than they were in December 2008.

Most Americans (59%) say that the country is now in a recession, a little more than a quarter (27%) say the U.S. economy is in depression. These evaluations are also little changed from February. Late last year there was a partisan gap when it came to economic ratings, with Republicans somewhat less likely than Democrats and independents to assess the economy negatively. However, in 2009 there has been little variance across partisan groups and the current survey finds Republicans, Democrats and independents giving the roughly the same ratings of the state of the economy.

No Consensus on Future Economic Outlook

While the public takes a dismal view of current economic conditions, the view for the future is more mixed. About four-in-ten (41%) say that a year from now economic conditions in this country will be better than they are today; slightly fewer (37%) say conditions will be the same as at present, while 19% think economic conditions will be worse in a year. On this question, the most optimistic view is held by Democrats. A 56% majority of Democrats say the economy will be better in a year, 33% say it will be the same and fewer than one-in-ten (8%) think things will be worse next March. Democrats are largely alone in their optimism: pluralities of Republicans and independents expect things to be about the same in a year and Democrats are one of the only groups in which a majority says the economy will be better in a year.

In recent months, the public has remained steady in their outlook for the future: they are no more or less likely to see improvement or worsening in the economy than they were in February or December of last year.

Top Personal Economic Worry

When asked to think abou
t their own financial situation, concern over jobs outpaces rising prices, problems in the financial markets, and declining real estate values as the public’s top economic worry. More than four-in-ten (42%) say they worry most about jobs; about half as many report worrying most about rising prices (22%), and problems in the financial markets (21%). One-in-ten cite declining real estate values as the economic issue that they worry most about. The balance of opinion on this question is little changed since February; though as recently as last December, worries over rising prices and the problems in the financial markets were just as widespread as worry about jobs.

Concern about the job situation is particularly pronounced among blacks, lower income households, and the young. More than half of blacks (55%), those younger than 30 (60%) and those making less than $30,000 a year (54%) cite jobs as the issue they worry most about in regard to their own financial situation. Furthermore, Democrats and independents are more likely than Republicans to worry about jobs. High-income households have a different order of concerns: those making $100,000 a year or more cite problems in the financial markets as their top concern (42%), followed by the job situation (30%). Similarly, those 65 and older divide their worry about equally among jobs, prices and the financial markets.

Homes — Not Stocks — Seen as Better Bargain

Despite the Dow Jones Industrial Average losing roughly half of its value since late 2007, most Americans say now is not the time to go bargain-hunting in the stock market. A 54% majority say now is a bad time to invest in the market, while 39% say it is a good time. The share saying it is a bad time to invest is little changed since February of last year and remains as pessimistic a reading as the question has garnered in its four-year trend. Nonetheless the percentage calling it a good time to invest has inched up slightly since February as the share of respondents saying they don’t know whether it is a good or bad time to buy has declined.

High-income and more-educated Americans take a more optimistic view of the market than those with lower levels of income and education. More than half of those with a college degree (51%) and those with household incomes of $100,000 or more (54%) say now is a good time to invest in the stock market. By contrast, less than a third of those with no more than a high school diploma (31%) and those earning less than $30,000 a year (23%) say that it’s a good time to invest. Additionally, regular stock traders are overwhelmingly more likely to see a buying opportunity than are those with no investments in the stock market. Among the 7% of Americans who say they trade stocks and other funds pretty regularly, 65% think it’s a good time to invest compared with 26% of those with no investments in the stock market.

Overall, the public is more upbeat about buying a home in the current economic climate. Three-quarters say now is either a very good (18%) or good (57%) time to buy a home, while 21% call it either a bad (17%) or very bad (4%) time to buy. As with investing in the stock market, high-income households and the more educated are among the most likely to say it’s a good time to buy. College graduates are 23 points more likely than those with no more than a high school diploma to say now is a time to buy. People with family incomes of $100,000 or more are 29 points more likely than those earning less than $30,000 to say it is a good time to buy a home. Nonetheless, majorities of those with low levels of income and education agree that it’s a good time to buy a home and this sentiment is widespread – to varying degrees – across demographic groups.