I think so. And I certainly hope so. But not many Americans agree with me according to a new Rasmussen poll. Only 38% of respondents believe that the economy will be stronger in a year. Meanwhile 39% think it will be weaker. That’s up 8% from a year ago. I find these results quite surprising and rather troubling.
I both love and hate polls. So often the results are so counterintuitive that I hardly know what to say about them. But they aren’t worthless. The thing to remember is that they’re just polls, nothing more. So what this says is just that 39% of respondents in Rasmussen’s poll believe that the economy will be weaker in a year. According to Rasmussen, this is generally representative of the U.S. population.
But what exactly does this statistic mean? Will unemployment be higher? Will home prices be lower? Will Americans be spending less? Will manufacturing output dive? Will GDP plunge? There are so many measures of economic health and stability that I can’t be sure what those respondents had in mind when they said they believe the economy will be weaker.
Yet, a general feeling of pessimism does mean something, particularly for spending. If that many Americans are still that gloomy about the nation’s economic prospects, then to me that indicates that they’re going to be very cautious with their wallets. And if spending doesn’t pick up much this year, then that could make for a self-fulfilling prophecy. U.S. GDP is very dependent upon consumer spending. Without its revival, the economy will have a hard time gaining its footing.
This also may say something about unemployment. In theory, those polled should include a representative portion of business owners and management. Although we don’t know the exact breakdown, if that subset is also pessimistic at a 39% proportion, then this confirms the idea that employment growth will be quite slow. If management thinks things will be worse in a year, then they’re not going to be doing a whole lot of hiring in 2010.
Don’t get me wrong: we can’t will ourselves into recovery. The financial crisis and the deep recession that followed exposed some real, fundamental structural flaws in the U.S. economy. They won’t be quickly fixed. But pessimism can gunk up a recovery. Psychology matters more in economics when consumers see the glass as half empty.
I have a little trouble imagining that things on a whole will be worse in a year. That would almost certainly mean a double-dip recession is in the cards. If unemployment is over 10% in November 2010, then we’re in a lot of trouble. (And Democrats are really, really in trouble.)
So count me in the more optimistic — but only slightly optimistic — 38%. I think the recovery will be slow, but I can’t believe that things will be even worse in a year. Even with mixed economic indicators, we’re seeing enough green shoots to indicate that the economy isn’t experiencing much further deterioration.
