Americans have become even gloomier about the economy, but the reality may not be all that bad, says an economist.
Americans have become even gloomier about the economy, according to a survey by Bloomberg/Los Angeles Times.
Sixty-five percent of the 1,209 adults polled expect a recession, with only 29% disagreeing, according to Bloomberg.
Meanwhile, 51% of those polled believe that the economy is doing poorly, marking a new low for optimism – one that hasn’t been felt in more than four years.
That information was released on a week of negative economic reports: New orders for durable goods slipped by 1.7% during September, continuing the 4.9% fall from August.
Chain-store sales fell 1.5% during the week of Oct. 15, compared to a 1% gain in the previous week.
But Americans’ fears of a recession may be unfounded, according to Jeoffrey Hall, chief U.S. economist at Thomson Financial IFR in Acton, Mass.
“A lot of things feed into consumer sentiment,” he said. “The daily pitching and rolling of the stock market upsets investors. There are also psychic impacts from daily headlines of how bad the economy is.”
Despite the negative data from this week, a significant amount of information suggests that consumers are doing better than they think they are, Mr. Hall said.
He pointed to the 0.6% increase in retail sales for September, which followed a 0.3% gain in August. Employment has been fairly strong as well, picking up 110,000 new jobs last month, continuing the prior month’s rise of 89,000.
“Consumer spending has been up tempo, given surveys that suggest sentiment is drifting,” Mr. Hall added. “People are continuing to spend, and the true ability to do that comes from current wages.”
