Economy is Strong, But Americans Pessimistic

As growth surged toward yearend, it’s clear the American economy in 2021 was one of the best performing in the world and as strong as it has been since before the Great Recession of 2008-09. The S&P market index was up 27 percent, the largest gain in 20 years; unemployment fell to 4 percent by year’s end; wages are trending upward, with employees in demand; and the GDP projected to reach 5 percent in 2022, although after a slow start due to the continued pandemic.

But, there still is uncertainty with inflation ending the year at above 6 percent and the newest Covid variant, Omicron, causing record-high hospitalizations and a quarter of the public stubbornly anti-vaccination.

A comparison of Gallup’s economic polling data from late 2021 and February 2020, just before news of the pandemic was broadly reported, is significant. A “poor” rating of the economy grew by 27 percent over the period and “only fair” was up 14 percent. The shift came from “excellent” and “good” ratings that dropped similar amounts from early 2020.

A review of Gallup’s near monthly reporting of the data shows that the shift to the negative view on economic conditions on both measures took place starting in the early summer of 2021 as the Covid Delta variant emerged.

The public’s view of future economic conditions is equally down and reflects a major shift since before the pandemic, with 70 percent of people currently rating the economic conditions as “getting worse” compared to 33 percent in February 2020 and only 26 percent currently saying they are improving versus 61 percent in early 2020.

The pandemic and its affect on the public is shaping the public’s view of the economy more than much of the good end of year economic news.