American Economy,  Polling

Poll Watch: 55% Say the United States is in Recession or Depression



According to the latest Gallup Poll.

More than half of Americans (55%) describe the U.S. economy as being in a recession or depression, even as the Federal Open Market Committee (FOMC) reports that “the economic recovery is proceeding at a moderate pace.” Another 16% of Americans say the economy is “slowing down,” and 27% believe it is growing.

This poll is better than September 2008 which was the height of the financial melt down, but still higher than 6 months earlier. Most Californians I speak to perceive the economy continuing in recession.

What are the implications?

Although economists announced that the recession ended in mid-2009, more than half of Americans still don’t agree. These ratings are consistent with Gallup’s mid-April findings that 47% of Americans rate the economy “poor” and 19.2% report being underemployed.

It also seems likely that most Americans would not agree with the FOMC’s assessment of the current economic recovery. Nor does it seem likely that — given surging gas and food prices — most would agree with the Committee that “longer-term inflation expectations have remained stable and measures of underlying inflation are subdued.”

Although the FOMC seems to perceive current economic conditions differently than most Americans, it does say it needs to “promote a stronger pace of economic recovery” by continuing its aggressive monetary policy, often referred to as “quantitative easing,” through June. On the other hand, in the press conference after the FOMC’s April meeting — the first ever by a Fed chairman — Ben Bernanke said that, “the trade-offs are getting less attractive at this point,” meaning it is getting harder to aggressively add liquidity to stimulate stronger economic growth while avoiding inflation.

In another possible disconnect with monetary policymakers, many Americans may not see the trade-off Bernanke suggests between promoting a stronger economy and experiencing higher inflation. Right now, prices are soaring, yet the latest Gallup Daily tracking data show that 67% of Americans say the economy is “getting worse.”

So, is the predicted inflation the answer?

Doubtful – as some Americans continue to remember the days of Jimmy Carter.