On Wednesday, quarterly GDP numbers were released and showed the economy growing at an annualized rate of 3.9 percent, quite respectable in historical terms. But turmoil in credit and housing markets is making people nervous. And the core problems that have bedeviled the economy since early in the Bush administration—stagnating wages and incomes and eroding benefits—remain with us.
That’s why the public’s views on the economy remain pessimistic, despite the overall economic growth indicated by this report. For example, in an early October Gallup poll, conducted right after the end of the quarter covered by the new GDP numbers, 67 percent described economic conditions as “only fair” (44 percent) or “poor” (23 percent), compared with 33 percent who thought conditions were “excellent” (5 percent) or “good” (28 percent).
That compares with the exact reverse reading of 67 percent excellent/good and 33 percent only fair/poor in January, 2001 at the beginning of Bush’s first term—a particularly amazing contrast when you consider that the current economic expansion is now six years old. For the public, length of expansion and quality of expansion are clearly two different things.
Moreover, the public fears the economy is getting worse, not better, reflecting the underlying problems mentioned above. In the same Gallup poll, almost three times as many people say the economy is getting worse (66 percent) as say it is getting better (23 percent).
You could sum it all up with a question asked of registered voters in a September Lake Partners/Change to Win poll: “No matter what you hear about the economy, working families are falling behind.” The response? An overwhelming 83 percent agreed and just 13 percent disagreed. Given that, it’s not hard to predict how this latest GDP growth report will go down with the public.