Economists may be starting to temper their pessimism about a possible recession, but most people still see trouble on the horizon. According to the ABC News Consumer Comfort Index [PDF], Americans are as pessimistic about the economy today as they have been in the last 27 years, with more than three-quarters of respondents saying the economy is worsening. The latest Consumer Comfort index stands at -47 on a +100 to -100 scale, three points shy of its all-time low in 1992.
Fully 77 percent of those surveyed predicted the economy will continue downhill -- matching the question's record low from 1990 -- while a mere 4 percent indicated that the economy is improving. For the past seven months of the survey, at least six out of 10 respondents have told pollsters things are worsening -- yet another record. Positive ratings of the national economy have plummeted 18 points since the beginning of the year, with only 13 percent of respondents rating the economy positively. A recent Gallup poll only reinforces these bleak numbers: An overwhelming 87 percent of respondents said economic conditions are worsening, and a scant 15 percent rated them as either "excellent" or "good."
A recent ABC News/Washington Post poll [PDF] also echoes these dismal numbers and gives a clearer picture of Americans' anxiety over their personal finances. Nearly seven of 10 respondents said they're worried about maintaining their current standard of living, a jump from the 51 percent who said as much at the end of 2007. The portion of those not worried about their standard of living dropped from half to a third during that same period. Not surprisingly, the main sources of concern are rising prices in general and skyrocketing gas prices in particular. Two out of 10 cited gas prices as their chief concern, second only to the third of respondents who cited general inflation.
When asked who's to blame for rising gas prices, respondents were quick to point fingers in three main directions: oil companies (30 percent), the Iraq war (12 percent) and the Bush administration (10 percent). But despite public discontent with gas prices, one proposal to alleviate the financial hardship -- suspending the federal gas tax over the summer -- received mixed reviews. Forty-six percent said they support the suspension, but 47 percent said they oppose it.
Indeed, a Moore Information (R) poll [PDF] taken at the end of April shows little consensus among the public about how to alleviate pain at the pump. When asked to name the best way to reduce reliance on foreign oil, 30 percent recommended allowing more domestic drilling, while the same percentage said investing in alternative energy sources. Other solutions, such as offering tax incentives to individuals who conserve energy and imposing stricter fuel efficiency standards, received meager numbers (9 percent and 6 percent, respectively).
New data from a Los Angeles Times/Bloomberg News poll [PDF] indicates that those consumers with more knowledge of the markets -- investors -- are not as anxious about the long-term state of the economy as the average American. The LAT/Bloomberg survey oversampled people who own stocks, bonds or mutual funds, and those with a household income of over $100,000, to examine how their outlook on the economy differed from the general public.
Non-investors were slightly more likely than investors to say that the economy is in a recession and were substantially more likely to say the country is in a serious recession. Thirty-two percent of non-investors rated the current economy as being in a serious recession, compared with just 17 percent of investors and 10 percent of those making $100,000 or more. Non-investors also reported more alarm about the threat of inflation, with one in five saying they thought inflation will rise much higher in the next year, as opposed to just 11 percent of investors.
Investors and the wealthy were more likely to say that international free trade has helped the American economy, with three in 10 investors and half of those making $100,000 saying it has played a beneficial role, compared to just one in five non-investors. But investors also acknowledge that international forces can be a threat to the economy; 35 percent said they think the cost of oil and gas is the factor that poses the greatest risk to U.S. prosperity over the next five years, compared to just one in four non-investors.
When it comes to the current housing crisis, investors were more likely to assign blame for the subprime mortgage mess on both lenders and borrowers, while non-investors were more likely to point the finger at lax government regulation. This explains why fewer investors than non-investors support government assistance for homeowners hurt by the housing bubble. The two groups also have different opinions on Washington's reaction to the financial downturn. Six in ten non-investors think that the government should enforce stricter regulations on Wall Street, while just 51 percent of investors and only 43 percent of those making $100,000 think that there should be more aggressive regulation.