Feb 6, 2023
Americans’ Economic Outlook Is Mostly Negative in Gallup Poll
(Bloomberg) -- A record number of Americans expect a stock-market slump in 2023 and a majority sees inflation accelerating, according to a poll of economic expectations, even as price growth is slowing.
The annual Gallup poll, which ran from Jan. 2 to Jan. 22, showed that Americans’ outlook on five economic metrics — economic growth, the stock market, unemployment, interest rates and inflation — was largely negative.
Four in ten Americans predicted unemployment would rise, with the remainder split between a decline and a steady rate, the poll released Monday showed. A majority said borrowing costs and the inflation rate would increase, although the share who thought price growth would quicken fell from last year’s record.
The survey results reflect widespread economic unease, which Gallup researchers attribute to still-high inflation, interest-rate hikes and widespread tech-sector layoffs to cap off the year in 2022. Though the US consumer has proven resilient thus far and the jobless rate is at the lowest level since 1969, the findings could indicate a cautious approach to the coming months as the Federal Reserve focuses on reducing inflation without triggering a spike in unemployment.
Republicans are much more pessimistic than Democrats, holding majority-negative views on every metric other than unemployment, which 48% of GOP voters think will rise. Republicans are particularly negative on inflation — 78% predict an increase — and interest rates, which 76% of Republicans think will increase.
The consumer inflation rate was 6.5% in December, having fallen steadily from a June peak of 9.1%. The Fed has indicated it will continue to raise interest rates in small increments over the coming months to reach a terminal rate above 5% as its preferred measure of annual price changes — the personal consumption expenditure index — remains far about the Fed’s 2% goal.
This year also marked the first time that more Americans thought economic growth would decrease than increase, according to Gallup, although the polling agency noted that it’s likely Americans held similar views during the Great Recession.
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