Looking ahead, Americans are rosy about economy
American consumers appear to be highly resilient.
Though hit hard by the Sept. 11 terrorist attack and signs of a recession, their view of their own economic and financial outlook has brightened.
Retail sales rebounded partly in October after a bad beating in September. That was particularly so for discounters such as Wal-Mart, Kmart, and Costco. Department stores were still struggling.
Now, a new Christian Science Monitor/TIPP poll hints that Americans expect a recovery in the first or second quarter of 2002. An index on how they see economic conditions in six months rose to 47.4 in November from 45.5 in October. It was the second monthly rise in a row. A reading above 50 reflects optimism.
Further, an index on their personal financial outlook for the next six months improved to 58.1 this month from 57.2 in October. The polling firm surveyed 920 adults by telephone, with an error margin of plus or minus 3.3 percentage points.
"There is a feeling that the economy has already bottomed out and the worst has already been seen," says Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Intelligence Inc.
Mr. Mayur adds: "Though we may still be in a bear [stock] market, the market is showing good signs of recovery."
Heightened confidence is just what the Federal Reserve has been seeking with its repeated interest-rate cuts.
"Further vigorous easing action would tend to support business and household consumer confidence, which a number of members saw as especially important in the current circumstances," note the minutes of the meeting of Fed policymakers on Oct. 2, released last week.
At that meeting, the Fed cut short-term interest rates by half a percentage point to 2.5 percent. The Fed made a same-size cut last Tuesday in the federal funds rate.
Mayur figures that "first and foremost Americans are banking on the government" to come to the rescue of the economy. Beside the Fed's action, they are expecting Congress to come up with an economic stimulus package, he says.
In addition to measuring economic confidence, the TIPP poll suggests the "rally effect" that lifted public approval of government might be fading.
An index that tracks Americans' satisfaction with federal economic policies stood at 52.7 in early September, rose to 70.2 in October after the attack, and sank back to 64.7 in November. A rating above 50 on the index is positive.
Mayur sees the decline as reflecting the fading of bipartisanship in Washington, as politicians start fighting over the economic stimulus package and other bills.
"Old-time partisanship is reappearing," he says.
Others speculate that the Bush administration's handling of the anthrax threat may have bothered some Americans.
This somewhat less favorable view of Washington policies brought down the TIPP economic optimism index by 0.9 to 65.1 in November. But it remains solidly in "positive territory."
All 21 groups tracked by TIPP, covering region, age, gender, race, income, and party, remain positive. Republicans are the most bullish on the economy. They believe a Republican president will take the right steps to help the economy. But Democrats and independents also share in the optimism, says Mayur.
A majority of Americans give President Bush an "A" or a "B" on handling the economy, the survey shows.
Other polls show a similar resiliency. An NBC-Wall Street Journal survey of 809 adults found that half think the US is in recession, and another one-quarter expect a recession in the next 12 months. But only one-fourth are at least fairly worried that they or someone in their family will lose their job - slightly higher than the number who felt that way before Sept. 11.
Another poll, by Wirthlin Worldwide, a research and consulting firm based in McLean, Va., asked Americans which activities they find more appealing or less appealing since Sept. 11. The results showed that Americans, shaken by the attack, are "burrowing."
They found more appealing such activities as spending time at home with family and friends (46 percent); eating with friends and family (35 percent); watching TV with friends and family, as opposed to alone (30 percent); cooking meals at home (25 percent); and reading (22 percent).
They found less appealing planning vacations (39 percent); shopping for items they don't need but would like to have (36 percent); going to see movies (22 percent); and eating out in restaurants (22 percent).
Business, of course, hopes that Americans will leave their burrows as the Thanksgiving and Christmas shopping days approach.