Americans See Worsening Economy

Also, for the first time in more than seven years, a majority of Americans said that it is a bad idea to invest in the stock market. Nevertheless, Americans remained generally upbeat about their own financial situation, with most expecting to be better off next year than they are now.

The poll results are based on telephone interviews conducted Jan. 10-14, 2001, with 1,003 national adults, aged 18 and older, and found that 67 percent of Americans rated the economy as excellent or good, 27 percent as fair and just 6 percent as poor. These figures are comparable to the beginning-of-the-year ratings found by Gallup for the three previous years, but significantly higher than the ratings in 1997 - shortly after Clinton was re-elected. When Clinton first won election over George Bush in 1992, almost four times as many Americans rated the economy poor as rated it excellent or good.

Despite these high ratings of current economic conditions, Americans express a rather pessimistic view of where the economy is headed. A clear majority - 56 percent - believed that the economy is getting worse, while just 32 percent said it is getting better. This is the most negative projection of the economy that the American public has rendered in the past four years. At the beginning of 1996, more Americans said the economy was getting worse (49 percent) than better (39 percent), but by the end of the year - before the election - sentiment had turned in the opposite direction. By a small margin in 1997, but by margins of two-to-one or better for the following three years, Americans described the economy as getting better rather than worse.

This same pattern is found in the data on whether Americans think it is a good or bad idea to invest in the stock market. The current results show that a majority - 53 percent - said that if they had $1,000 to spend, it would be a bad idea to invest in the stock market, while 42 percent say it would be a good idea. This is the worst margin against investing in the stock market since before 1997.

While Americans tend to be generally pessimistic about the future of the economy, they are more positive about their own financial situation. By 49 percent to 30 percent, they said they are better off today financially than they were a year ago, and by 63 percent to 21 percent they expected to be better off next year than they are today. Still, even here there are some warning signs. Both of these personal financial measures, although positive, are the lowest in the past several years. And among people who are employed, about a quarter - 26 percent - said they are worried that either they or their spouse might lose their job in the coming year. A much higher 70 percent said they are worried about inflation and rising prices.