- Most Americans think the US is in a recession, according to a new Economist and YouGov poll.
- In addition to strong majority of Republicans, nearly half of Democrats share the same concerns.
- The latest jobs data shows the country a long way from a downturn, and experts see strong growth ahead.
It's not just inflation that's dampening Americans' moods. The majority of US adults now think the economy is in the tank.
Fifty-five percent of surveyed adults believe the US is currently experiencing an economic recession, according to a new poll conducted by The Economist and YouGov. Just 21% of surveyed adults don't believe the country is in a downturn, and 24% said they weren't sure if the economy was in a slump or not.
The survey highlights just how large a gap exists between the actual path of the economy and Americans' perceptions of it. A wide range of indicators show the country still firmly in recovery mode, and with little sign of a near-term recession. The economy added 390,000 jobs in May, beating forecasts and signaling the economy is settling down while still featuring strong job growth. Americans' spending held at record highs through April, and historically low jobless claims hint there hasn't been a sizable uptick in layoffs. The recovery isn't moving as quickly as it was last year, but it's far from reversing course.
That performance hasn't been enough to quash Americans recession worries. Consumer sentiment has hovered around decade lows through much of the year, with most citing sky-high inflation for their soured moods. Two-thirds of surveyed adults said inflation was a "very important" issue, while another 26% deemed it a "somewhat important" problem, according to the Economist/YouGov survey.
While downturn fears had mostly been held by Republicans disapproving of the Biden administration's policies, the bleak outlook has spread across party lines. Forty-three percent of Democrats believe the US is in a recession, overtaking those who don't hold that outlook and those who aren't sure. Seventy percent of Republicans and 55% of Independents believe the country is in a downturn.
But where the average adult is turning more pessimistic by the day, experts poring over economic data are slowly walking back some recession concerns.
The encouraging May jobs report was the latest signal to prompt some encouraging forecasts. There "doesn't really seem to be strong economic evidence" that the recovery is slowing "dramatically," Daniel Zhao, a senior economist at Glassdoor, told Insider.
Even more bearish voices are turning positive. Former Goldman Sachs CEO Lloyd Blankfein said on May 15 that a US recession is "a very, very high risk factor," adding there's only a "narrow" path for the Federal Reserve to fight inflation without sparking a downturn. Yet the former chief executive took on a rosier tone after the May jobs report's release, saying in a Friday tweet that the economy "may yet land softly."
"Dial back a bit of the negativity on the economic outlook," Blankfein said. "The economy is starting from a strong place, with more jobs than takers, and is adjusting to higher rates."
—Lloyd Blankfein (@lloydblankfein) June 3, 2022
The pinch of inflation and slowing recovery might have Americans feeling bad about the economy. But as the latest data beats forecasts and experts rein in their concerns, the average adult could be in for a surprisingly strong 2022 economy.