Public views of the U.S. economy, already quite negative, have plummeted since January. Just 17% currently rate the nation's economy as excellent or good, down from 26% last month. The percentage of Americans rating the economy as “poor” has increased even more dramatically, from 28% to 45% in one month.
The public's sour view of the economy is now extending to people's views of their own finances:
- A majority of Americans (53%) now say their financial situation is only fair or poor, up from 49% in January.
- Fully 58% of the public says that their incomes are falling behind the rising cost of living. This compares with just 44% who expressed this view in September 2007.
- And the impact of the real estate slump is becoming apparent to American homeowners. The percentage of homeowners reporting that their home has increased in value during the past few years has fallen from 84% in October 2006 to 67% currently.
While several factors are driving the public's economic pessimism, including concerns about the availability of jobs as well as problems in the housing market, rising prices – for gasoline or energy, healthcare, or overall inflation – are mentioned most frequently as the nation's biggest economic problem:
- The leading personal financial concerns of the poorest Americans are healthcare costs, jobs, and simply not having enough money to get by. By contrast, the leading concern among wealthy people is retirement and Social Security.
- The recent rise in the percentage of Americans who say that their incomes are falling behind the cost of living has come largely among middle-income and poor people.
- The gap between the wealthiest and poorest people in the difficulty they report in affording basic items is much wider now than it was during the recession of 1992.
The survey shows that a large majority of Americans (82%) believe that an economic recession is very or somewhat likely in the next year. The bipartisan economic stimulus plan, signed by President Bush this week, is viewed positively. However, as other national surveys have found, relatively few people say that they plan to spend the money if they receive a rebate from the government. Just 19% say they would spend a rebate, while 47% say they would pay off bills, and 23% say they would save the money.
For all of the negativity about the economy, a plurality of Americans (41%) name the United States as the world's leading economic power. Three-in-ten (30%) say China is the top global economic power, while smaller numbers name Japan (10%) and the countries of the European Union (9%). During the late 1980s and early 1990s, as the United States faced rising economic competition from abroad, the public generally viewed Japan – not the United States – as the world's leading economic power.
Read the full report Economic Discontent Deepens as Inflation Concerns Rise on the Pew Research Center for the People and the Press Web site.