A mid-December telephone poll of 1,100 people showed that 40% thought the economy was getting worse, compared with just 30% who described it as getting better. The poll, conducted by American Research Group, had a margin of error of 3 percentage points.
In addition, the poll found more than one in four people -- 28% -- thought the economy is in a recession. And that marked an improvement from a month earlier, when 43% thought so.
"There seems to be a wide disconnect between the headline growth numbers and individual perception about the relative health of the economy," said David Joy, vice president of capital markets strategy for RiverSource Investments.
According to the Right Wing Noise Machine (RWNM), these poll numbers are the result of poor PR. If only the President and the RWNM made a coordinated effort, then everything would be OK.
So, why all this pessimism? The macro-numbers are great - strong GDP growth, low inflation and low-unemployment. What gives?
The answer lies below the surface of the US economy. If you look at the macro-numbers constituent parts, you see an economy that has some sectors doing well, but others languishing.
Non-supervisory wage growth has been terrible. From January 2001 to November 2005, non-supervisory wages have increased .5%. According to the Census Bureau, national median income dropped in 2001-2002 and has stagnated since. In addition, the poverty rate has increased in each year for the last 4 years.
Parts of the economy are doing very well. Real Estate is hot. However, real estate is responsible for a large part of the recovery. According to a Merrill Lynch analysis, housing is responsible for 50% of this expansion's growth.
Other areas of the economy are languishing. Since 2001, the manufacturing sector has lost 2.8 million jobs and information technology has lost 600,000.
All of the conflicting trends have lead to overall income drops:
Those with the lowest 20% of incomes experienced a 7.8% drop in earning power between 2000 and 2004 from $11,141 to $10,264.
And among the next 20%, the Census Bureau found the average income fell 5.7%, from $27,818 to $26,241 over the same period.
Incomes also fell among higher income groups over that period, but those in the top 20% saw only a 2.8% dip, from an average income of $156,054 to $151,593.
And over time, the gap between rich and poor has widened. People in the top 20% of incomes earned an average of 12 times as much as those in the bottom 20% in 1990. By 2004, it was nearly 15 times as much.
So, in short, people say the economy stinks because from their perspective, it does stick - their overall wages are dropping, which would concern anyone.
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