Americans More Optimistic Less Pessimistic About Economy

The headline from American Research Group (ARG) reads “More Optimistic,” but considering the negativity still present, the organization’s latest monthly wade into what can only be described as the pools of economic ignorance dated August 23 really tells us that people are “less pessimistic.”

The objective big-picture situation in the economy is this:

1. A sustained 4% growth rate over the last 13 quarters. The performance is slightly higher than the Clinton Administration’s best 7 years, and slightly lower than Reagan-Bush 41’s best 7, as shown here. This would still be true if the second quarter’s GDP growth of 2.5% were factored in.
2. Under 5% unemployment, within striking distance of what used to be considered “full employment.”
3. “Core inflation” under control (fingers crossed).

Given those facts, any decrease in the gap between perception in reality is welcome.

But, though there was improvement in ARG’s latest survey, there is clearly a long way to go to bridge the divide:

• One piece of “good” news is that “only” 28% of those polled think the country is in a recession, down from 38% a month ago. Of course, the US hasn’t been in a recession since March - November 2001, according to “the gurus,” and never was in recession during that time if the traditional definition of two consecutive quarters of negative growth is used. Late last year, an unfathomable 43% thought we were in a recession.
• The percentage thinking the economy is in “very bad” shape dropped from an utterly ridiculous 30% to 10%, and most of the reduction there led to increases in “very good” (from 8% to 17%) and “excellent” (from 6% to 10%).
• Though there was a move to the middle in peoples’ opinions as to whether the economy was improving (fewer said it was, but fewer also said it was getting worse), the real stunner was that 25% think that the economy will be better a year from — up from only 6% last month.

The WORMs (Worn-Out Reactionary Media, known to most as the formerly Mainstream Media) will probably be pleased to know that even though their negative and selective reporting on business and the economy hasn’t prevented a reduction in general pessimism, the Bush Administration is getting virtually no credit for this improvement — Only 32% (up from 31% last month) approve of the administration’s handling of the economy.

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UPDATE: Counterpoint — “Consumer Confidence Slides in August”