Three years the U.S. economy first entered economic turmoil in September 2008, job creation has rebounded from post-collapse lows, but economic confidence and consumer spending remain within the ranges seen in 2009, according to Gallup data. Gallup finds underemployment and unemployment essentially where they were a year ago.
Economic Confidence Back at Recessionary Levels
Americans’ confidence in the US economy is now at its lowest point since February 2009, near the conclusion of the recession that officially ended in June 2009. Gallup’s Economic Confidence Index was -52 in August 2011, above its financial crisis low of -58, but much lower than the -21 to -35 range measured from June 2009 to June 2011.
Gallup data shows the index saw sharp declines this year in April after the federal government nearly shut down amid budget negotiations, and in July and August after protracted negotiations that ultimately produced an agreement to increase the nation’s debt ceiling.
Americans’ current level of economic confidence, which represents their views on the current state and future direction of the nation’s economy, is decidedly negative. Gallup data indicates 77% of US consumers said the economy was getting worse in August, the highest by far since February 2009, the month in which Congress passed a $787 billion stimulus bill in hopes of lifting the US economy out the depths of the recession. Americans’ negativity about the future of the economy eased in March and lessened further in April of that year.
Consumer Spending Remains Stagnant
US consumer spending has remained essentially stagnant since it fell dramatically in January 2009. Spending in stores, restaurants, gas stations, and online has averaged $66 per day so far in 2011; similar to $65 in 2010 and $64 in 2009. However, the 2011 figure is 31% lower with an average of $96 per day in 2008. That year, Americans’ daily spending ranged from $81 to $114 per day in monthly averages. Since 2009, monthly spending averages have ranged between $58 and $75.
Job Creation Improves But Has Long Way to Go
The +13 Job Creation Index for August falls into the +10 to +15 range Gallup has measured since October 2010. The good news is that for nearly a year, Gallup has found consistently higher rates of net new job creation (the difference between hiring and letting go) than it did for the first two years after the global economic collapse. The not-so-good news is that the current rate of job creation is still just half of the +26 score Gallup found when it began tracking this metric in January 2008, when the nation was already technically in a recession.
Underemployment and Employment Stuck at Year-Ago Levels
Gallup found 18.5% of workers underemployed, including 9.1% unemployed, in August 2011. These figures are based on Gallup’s measure of employment, which is not seasonally adjusted. Both of the current figures are statistically similar to what they were a year ago, meaning the employment situation in the US is no better now than it was at that time.
Gallup’s trend dates back to January 2010, so Gallup cannot say definitively how its latest numbers compare to what they would have been before the global economic collapse. However, comparisons with January 2010 reveal that the trajectory is neither linear nor positive. At that time, Gallup found 19.9% of workers underemployed and 10.9% unemployed. The current figures are slightly improved from then, but underemployment is significantly higher than the 17.2% recorded in November 2010 and unemployment is significantly higher than the 8.7% recorded as recently as June 2011.
Consumer Reports: Sentiment Improves from Aug. Nosedive
The September 2011 Consumer Reports Index, a measure of overall consumer financial health, showed signs that sentiment is improving after plummeting to its lowest level in nearly two years last month. The Consumer Reports Sentiment Index rose to 48.8, up from 43.4 in August 2011 and 44.1 in September 2010.
The most optimistic consumers were age 18-34 at 56.4, and households with income of $100,000 or more at 56.1. The most pessimistic consumers were households with income less than $50,000 (44.5), and those who are age 65 and older (40.1). Each demographic group showed noticeable increases in overall sentiment compared with August.
About the Data: The findings in this analysis are based on monthly averages, based on approximately 15,000 interviews per month.