While Democrats and Republicans were arguing over how to prevent the U.S. from a default, families across the country have become increasingly concerned about the overall state of the economy, according to the American Enterprise Institute’s latest compilation of recent polls taken in various regions.
Friday’s worse than expected GDP numbers only reaffirm this notion. The U.S. economy grew less than expected in the second quarter at 1.3%, but the bigger shock came after Q1 GDP was revised down to 0.4% from 1.9%. These numbers suggest the country could be headed for another recession and Americans are definitely feeling the pain. (See: 2011 Is Proving to Be a Horrible Year For the Economy)
One of the most disconcerting findings in the AEI report is a CBS/New York Times poll from June. It showed that over the last year, more Americans have come to believe the current economic downturn is part of a long-term permanent decline and that the economy will never fully recover. In October 2010, 28% of respondents agreed with that statement, versus 39% last month.
“Americans are so pessimistic about the economy now … . And the level of public pessimism is actually higher than the deep 1981-82 recession overall,” due to grim personal outlooks on a number of issues like jobs, retirement and health care, says Karlyn Bowman, a senior fellow at AEI who co-authored the report. “Their negative sentiments are affecting the way they feel about their family’s future, and interestingly, the way they feel about their state governments. Usually negative attitudes about the national government don’t seep into attitudes about the state government, but this time it is really different. This negative, gloomy mood is pervasive.
Speaker of the House John Boehner echoed these concerns Thursday before one of the many failed House votes to raise the country’s debt ceiling. “This is a challenging time for our country,” he said. “Americans are worried about their jobs. They’re worried about our economy. And they’re worried about our debt.”
Since the polls in the report were conducted before the debt-ceiling debate really began heating up over the last few weeks, one might conclude that if the same questions were asked today the responses would be even more pessimistic.
Here are other key findings from the AEI report:
Job anxiety: In the past six months, about 5% of Americans surveyed had lost their job, two in 10 said a family member had lost a job, and six in 10 knew someone who lost a job.
In June 2011, 58 percent were very or somewhat worried they could lose a job in the next 12 months. Nearly eight in 10 say jobs are difficult to find where they live. Around a quarter are worried about benefit or pay cuts.
Cutting back: Americans are cutting back on everything from health care to haircuts. Fewer than four in 10 say their personal financial situation is in excellent or good shape right now. Almost as many people say they are falling behind as believe they are getting ahead, but the vast majority describe their financial situation as having just enough money to maintain their standard of living. Inflation worries are high and steady.
Retirement: There’s been a dramatic drop in the number of Americans who say they have enough money to retire. In 2002, around six in 10 believed they would have enough money. In the latest survey by Gallup in April, only about four in 10 say they will.
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