Federal Reserve officials admitted this week that the country is facing a two-front fight against depressed economic growth and rising inflation. And with gas prices soaring to record highs just as a long holiday weekend approaches, it is little wonder that consumers are troubled by the state of the economy. New polls show nearly nine in 10 Americans consider the economy to be in bad shape -- the survey's worst assessment since 1992.
The ABC News Consumer comfort Index currently sits at -49 on a +100 to -100 scale, a mere 1 point away from its all-time low of -50 recorded in February 1992. A record low 19 percent of respondents indicated it's an excellent or good time to buy things. Gallup's daily tracking numbers register similar public distress, with the number of respondents indicating that economic conditions are excellent or good hovering around just 17 percent since the beginning of May. Just one in 10 reports that conditions are getting better.
Are Americans waiting for the light at the end of the tunnel in the form of their tax rebates? Slightly more than a quarter of respondents told Gallup pollsters that they have received their rebates, which are part of the economic stimulus bill signed into law in February. But the survey reveals that the rebates have made little, if any, difference in respondents' perceptions of current economic conditions.
Forty-three percent of those who already received their checks rated the economy as poor, the same number as the respondents who had not yet gotten their rebates. Similarly, only 18 percent of people who had received their rebates -- and 16 percent of those who hadn't -- rated the economy positively. And rebate or no rebate, expectations for the future of the economy were dismal across the board. Nearly nine in 10 Americans (87 percent of those with rebates and 86 without) indicated the economy is getting worse, while a scant 10 percent of both groups said the economy is improving.
Moreover, according to Gallup's analysis, the rebate checks are not likely to achieve their intended purpose: increasing consumer spending. "There seems to be little likelihood that the tax rebates will stimulate added non-rebate-related consumer spending, because they really don't seem to be cheering up consumers," Gallup's analysis explains.
More data from Gallup shows yet another problem on the horizon: evidence that jobs have become even more scarce throughout April and May than originally predicted. Gallup's "Net New Hiring Activity" measure, which tracks job creation or elimination, has continued to decline since the beginning of the year, dropping even more dramatically between the end of March and the middle of May.