It may be the surge in inflation or the lengthy drop in home prices or the 6.2 million unemployed America–but consumer economic optimism fell apart in March. That bodes poorly for second quarter GDP and spring retail sales.
A new poll from Gallup says “Americans’ optimism about the future direction of the U.S. economy plunged in March for the second month in a row, as the percentage of Americans saying the economy is “getting better” fell to 33% — down from 41% in January.”
The number has dropped to mid-2010 lows and equals measurements taken in early 2009 at the depths of the recession.
The research firm also reported that “Gallup’s Economic Confidence Index, which includes the economic optimism measure, also plunged in March to -31. This is worse than the -21 in January and about the same as the -30 of a year ago.”
Fuel and commodities prices should not do much to set back the economy according the experts which include Ben Bernanke. That point of view is in spite of the slowdown in investment from the original Obama stimulus package. Congress has taken up the cause of austerity even though there are warnings that cuts in government spending will hurt GDP
The impression from the Gallup research are another sign that the economic recovery has begun to move backwards.
Douglas A. McIntyre
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