National Economic Ratings

Americans continue to offer overwhelmingly negative assessments of national economic conditions, and the percentage saying the nation’s economy is in poor shape has risen sharply in recent months. Fully 95% now give negative ratings of the economy, including 71% who describe current economic conditions as “poor” (another 24% say it is “only fair”). The share of Americans saying the economy is in poor shape has risen 12 points from 59% in December. At the start of last year, just 28% rated the economy as poor.

Republicans, Democrats and independents now offer nearly identical ratings of the nation’s economy. Today, two-thirds (67%) of Republicans describe economic conditions as poor, up from just 48% two months ago. Democrats and independents are also more likely to rate economic conditions as poor today, but the change is less steep among those groups.

Personal Ratings also Slipping

While public evaluations of the nation’s economy have fallen the most dramatically, there has also been a substantial slippage in how Americans are rating their own personal financial situation. At the start of 2008, when just 26% said the nation’s economy was in excellent or good shape, 49% said they themselves were doing well, while 49% said they were in only fair or poor shape financially. Today, with just 4% rating the nation’s economy favorably, personal economic ratings have also fallen. Most (61%) say they are in only fair or poor shape financially, while 38% say they are in excellent or good shape.

Recession or Depression?

Most Americans continue to describe the nation’s economic situation as a recession, but an increasing minority feels that the country is in a depression. Three-in-ten say the country is in a depression, up 10 points since December 2008. About six-in-ten (57%) say the economy is in a recession, compared with 64% two months ago.

Not surprisingly, people at the lower end of the socioeconomic spectrum are the most likely to see the situation in dire terms. More than a third (36%) of those with family incomes less than $30,000 say the country is in a depression; that compares with just 21% of those with incomes of $100,000 or more. Nearly half (46%) of people who describe their household as “struggling” say the economy is in a depression, compared with 22% of those who say they are “professional or business class” and 29% of those who say they are “working class.”

But the number saying the country is in a depression has increased across most
demographic groups. Those with annual family incomes of $100,000 or more are about twice as likely as they were in December to say the U.S. economy is in a depression (21% vs. 10%). On the other end of the spectrum, those with family incomes of less than $30,000 are also considerably more likely to express that view (36% today vs. 26% in December).

More Republicans, Democrats and independents also describe current economic conditions as a depression than did so in December. Currently, a quarter of Republicans, 30% of Democrats and 31% of independents offer that opinion. In December, Democrats were more likely than Republicans to say the country was in a depression (23% vs. 14%).

Economy Dominates Americans’ Views of the Most Important Problem

Eight-in-ten (80%) Americans now name an economic issue as the most important problem confronting the nation – the highest proportion naming economic concerns since this question was first asked by the Pew Research Center more than twenty years ago. As recently as January of 2008, only about a third (34%) of Americans mentioned an economic concern. By July of last year the share citing the economy spiked to 61% as gasoline prices soared. In the wake of the financial crisis last fall 75% cited economic issues as the most important problem facing the nation.

Today, 31% of Americans specifically mention unemployment and job related issues when asked about the nation’s biggest problem, a 22-point increase since October. By contrast, the financial crisis was mentioned by about a quarter (26%) of the public in October; that proportion is down to 16% today. Gas and energy prices – cited by 19% as the nation’s biggest problem last July, were not mentioned in the current survey.

Concerns about the country’s job situation are now more widespread than they were in January 1992 – the previous high-point – when 22% of Americans cited unemployment or jobs as the most important national problem.

Views about the nation’s most important problem cross demographic and political groups; large majorities of most groups cite economic issues when asked about the country’s most important problem.

Fewer Optimistic about the Economy

The proportion of Americans who say the economy will be better a year from now has fallen from 46% in October to 40% today. A solid majority now thinks that economic conditions will either be the same (38%) or worse (18%) a year from now.

Optimism about the economy has declined markedly among the more affluent, the more educated, and those who describe their family as professional or business class. About a third (34%) of those with annual family incomes of $100,000 or more now say they expect economic conditions in the country to be better a year from now; 56% expressed optimism in early October. The share of college graduates who see the economy improving over the next year fell from 52% to 35% over the same period.

By contrast, the nation’s economic future seems better to people at the lower end of the income ladder. Among people with family incomes of less than $30,000, the share saying the economy will improve over the next year has risen from 43% in October to 52% today.

Republicans also are considerably less likely than in October to express optimism about the national economy. Just three-in-ten (30%) Republicans now expect economic conditions to be better in a year; in early October, 52% expected improvements. The change has been less pronounced among independents and Democrats.

Can the Government Fix the Economy?

Confidence in the government’s ability to fix the economy has slipped over the last two months. Today, just over half of the public (52%) says the government still has the power to fix the economy, while 40% say the government can’t fix it so easily because we are part of a global economy. In December 2008, 59% said the government had the power to improve the economy, while 35% expressed skepticism.

Republicans and independents are especially likely to have lost confidence in the government’s ability to solve economic problems. By a 52% to 40% margin, Republicans now say the government can’t fix the economy so easily; in December, Republicans were evenly split, with 47% saying the government could not solve economic problems so easily and 48% saying the government still had the power to do so.

Among independents, 47% now express confidence that the government still has power to fix the economy and about the same number (45%) say the government can’t fix it so easily. This is a sharp change from December, when a solid majority of independents (59%) was optimistic about the government’s ability to solve economic problems. Democrats remain highly confident in the government’s ability to fix the economy; about two-thirds (65%) now express that view.