Two interesting new surveys are out today and they show an interesting story about perceptions of the U.S. economy.
ABC News/Washington Post in data collected 12/11-14 among 1,003 adults nationwide show the following:
- Nearly half (48%) of Americans are optimistic about the state of the national economy over the next 12 months while 50% are pessimistic.
- More than two-thirds (68%) of Americans are optimistic about their own families’ financial situation over the next 12 months; only 29% are pessimistic.
In fact, according to ABC/WaPo optimism about the national economy is actually higher today than it was in December of 2007.
But, before we get too excited, Gallup gives us this headline, “Idea of Economic Depression Becoming Less Farfetched”. According to Gallup data from the same period as the ABC/WaPo poll (December 12-14) and among the same audience (1,008 adults nationwide), 74% of Americans now believe it is likely that the U.s. will be in a Depression within the next two years and 35% think it is very likely to happen.
So which is it? Are Americans fairly well split on the future of the economy while still being optimistic about their own financial health, or are we all preparing for a Depression?
Some interpretation of the data suggests the former. The Gallup report highlights the increase in the “very likely” response from 20% in March to 35% in the December survey. This is certainly a jump but it also highlights something important–only a little over one-third of Americans are convinced the economy will slip into Depression, the rest are at worst unsure.
So, Americans are far from convinced that we are headed for a Depression. And almost as many Americans are optimistic about the economy over the next year as are pessimistic. Add to that the common observation that Americans remain much more optimistic about their own situation than about that abstraction we call “the economy” and we have a not-too-dire picture of Americans’ expectations for the coming year.
So what does this all mean? To oversimplify a lot, the consumer side of the economy is about expectations. If people think it is going badly then they will stop spending and it will go badly; on the other hand if people are generally optimistic, they’ll keep spending and things will go well.
Now that leaves out a lot of issues to do with credit and the production economy.
But at least in this one regard the data suggests that the fundamentals of the economy are…well, you know.
