Economists forecast that growth will pick up, but consumers don't agree
Americans are losing faith in the nation's economic recovery even as forecasters expect growth to accelerate, according to a Bloomberg National Poll.
Fewer people anticipate improvement in the economy's strength over the next year than in the last survey in June, with 27 percent saying the expansion will be more robust, down from 39 percent who expected improvement three months earlier.
Forty-four percent of poll respondents say they expect the economy, which has expanded for nine consecutive quarters, to remain about the same, while 28 percent see it weakening.
“We're still in a recession; I don't know why they say it's over,” says Chris Sams, 28, a disabled Navy veteran from Daingerfield, Texas. “It may be over in Washington, D.C., where the per capita income is higher than anywhere else, but down here the minimum wage is the highest wage.”
The results of the Sept. 20-23 poll reflect public impatience with an economy that has grown at an average rate of 2.1 percent since the recession's June 2009 end, a full percentage point below the 50-year average, according to data compiled by Bloomberg. Growth will slip to 1.60 percent this year, according to the median forecast in a Bloomberg survey of economists, before rebounding to 2.65 percent growth next year.
Political conflicts
Public dissatisfaction with the economy is also linked to growing distress over the nation's political conflicts. Only 25 percent of those surveyed said the U.S. is on the right track -- the lowest mark since September 2011, a month after Standard & Poor's downgraded U.S. government debt. Sixty-eight percent say the country is headed down the wrong track.
“You have a bunch of politicians in both parties arguing the finer points and doing nothing about the long run,” says Sams. “Both sides are wrong. Going forward, it's only going to get worse.”
Disputes between Democrats and Republicans over the federal budget, the nation's borrowing limit and President Barack Obama's new health-care law are threatening to trigger a government shutdown or a debt default.
Amid the political turmoil, those polled give little indication they anticipate major financial moves.
More than eight of 10 say they don't plan to take on more debt or borrow money to make ends meet. And pluralities of 40 percent or more say they see no change in either their overall financial security, job security for members of their households, retirement savings, investments, or their ability to spend on vacations or entertainment.
Job market
Poll respondents are less optimistic about the job market over the next year than they were in June. The percentage of those foreseeing stronger employment fell to 36 percent from 42 percent in the previous poll. That finding comes as the average number of jobs created each month declined to about 148,000 over the past three months from 172,000 in the three months preceding the last Bloomberg poll.
Fewer Americans also forecast improvement in the housing market with 42 percent saying the situation will get better, down from 51 percent three months ago.
To Thomas Metych, a 63-year-old retiree in Bradenton, Florida, the economy is “terrible,” and he says he expects “more of the same” over the next six months.
While economists in the Bloomberg forecasting survey say the expansion will reach a 3 percent rate by the third quarter of next year, that would come as a surprise to Wendel Smith, 39, of Alpine, Utah. A serial entrepreneur, Smith says he's focusing on online businesses that are less U.S.-centric.
'More bureaucratic'
Though he says property values in his area are heading up and jobs are plentiful, he believes the federal government has grown overly intrusive.
“Everything is becoming more and more bureaucratic,” he says. “It's more and more difficult to do business and more and more difficult to be an employer.”
Still, Smith was among the 56 percent of poll respondents who say they feel they are moving closer to achieving their career and financial goals. That figure is up from 50 percent in the previous survey; 35 percent say they feel they are losing ground on attaining their goals.
The yo-yoing recovery has eroded the president's standing on the economy. In the latest poll, 38 percent say they approve of the job Obama is doing to make people feel more economically secure while 53 percent disapprove.
Financial concern
The share approving of the president's efforts is down from 42 percent in June and 45 percent in February.
“I think he's scary,” says Judy Browne, 52, of Springfield, Tennessee, who says the president shouldn't send aid to Egypt “when there's lots that needs doing here in the states.”
The poll contains numerous indications of financial insecurity: 42 percent of those surveyed say they are unable to save what they need for retirement, while 40 percent say they need to put more money aside for costly items such as health care and education yet can't.
“I have less money to spend, and I'm going to have to be looking for more work,” says Browne, a former nurse who now cleans other people's houses.
Those making less than $50,000 a year are feeling especially strapped. Almost one-quarter say they expect to borrow money in the next year to make ends meet. That's more than twice the percentage of those earning between $50,000 and $99,000 who plan on such borrowings.
“The economy's going to get worse and worse,” says Renee Howard, 59, of Cincinnati. “You're just stuck.”
The poll of 1,000 adults was conducted by Selzer & Co., a Des Moines, Iowa-based firm. Its results have a margin of error of plus or minus 3.1 percentage points.
(Bloomberg News)
