Far be it for me to be a holiday Grinch, but the simple truth is that while many Americans will be putting on a brave front this season, beneath the surface lurks anxiety as deep as most of us can remember. Americans believe the economy is as bad as they have ever seen it, and the poll data reflects unrelenting economic misery.
One of the longest-running measures of economic sentiment is the University of Michigan’s consumer confidence survey, which has been conducted since 1946. In last month’s survey, more Americans said they were worse off financially than at any time in over 60 years. Sixty-one percent reported their family’s finances had worsened. Prior to this year, no more than 51 percent had ever expressed that view — and that was during the recession of 1980. Last month’s figure was fully 10 points worse than the previous record.
Compare today’s 61 percent saying their finances are worse to the numbers during other modern recessions. In the midst of the 1953 recession, no more than 26 percent reported their family’s finances had deteriorated. 1973’s oil embargo triggered another recession, and as many as 36 percent said they were worse off. President Bush’s father brought on a deeper trough, with 43 percent reporting a worsening financial situation.
We do not have precisely comparable questions from the Great Depression era, but consider this: In 1937, late in the Depression years, 58 percent said they did not feel better off in terms of their income and the cost of living than they had the previous year. Though the question is different, that is about the same number who feel worse-off today!
Moving from Americans’ personal lives to their perceptions of the national situation reveals similarly grim judgments. Gallup has asked Americans to rate the overall state of the economy since 1992. Recently, 95 percent offered a negative evaluation, including 73 percent calling it “poor.” Prior to this year, no more than 53 percent had ever labeled the economy poor, with 90 percent the previous high for negative views overall — both achieved during the 1992 recession.
A Los Angeles Times poll found 90 percent saying the national economy is doing badly — the most negative assessment they have received in 17 years of asking the question.
This nearly unprecedented bad economic news is certainly affecting holiday plans, as unremitting negativity has silenced cash registers across the country, deepening the recession and dampening holiday cheer. On average, Americans plan to spend $639 on holiday gifts, over $200 less than in 2007.
SpendingPulse estimates apparel sales are down 20 percent from this time last year and electronics are off 25 percent. Housing starts were down 47 percent from November of last year.
With so much negativity, it is no surprise that voters support a stimulus that combines spending and tax cuts by a 27-point margin, even when questioners made it clear the deficit would increase as a result. It’s a shame Congress and the president can’t deliver this much-needed gift before the holidays.
Mellman is president of The Mellman Group and has worked for Democratic candidates and causes since 1982. Current clients include the House and Senate majority leaders.