20% of Americans Believe the Next Recession Has Already Begun
In the United States, experts use a variety of measurements to assess economic health. These include figures like gross domestic product, the unemployment rate, wage growth, and more. By many of these measures, the U.S. economy is still going strong. Yet, according to a new Bankrate survey, a significant number of Americans not only believe a recession is imminent but some also say its already arrived.
For their survey, Bankrate spoke with both experts and “everyday Americans” to get their thoughts on economic topics. Asked about the overall state of the economy, 99% of experts rated it “excellent” or “good” compared to just 59% of average citizens. Moreover 12% of layman surveyed said the economy was performing poorly. Perhaps not surprisingly given the current occupant of the White House, Republicans were more likely the rate the economy’s status positively, with 77% of right-leaning respondents saying it was good or excellent. Meanwhile Democrats were split as 49% said it was good or excellent and another 49% saying it was poor or “not so good.”
Looking to when the next recession will hit, 55% of experts said it would arrive in one to two years while 44% estimated it would take two years or more. However, although the top response among everyday Americans was “two or more years” with 26%, one in five suggested it had already begun. Additionally 21% said a recession would begin within a year’s time. Once again, political allegiances also played a role in responses as 27% of Democrats said the recession had begun and 35% of Republicans expect its arrival was more than two years out.
Speaking to Yahoo Finance about the survey’s finding, Bankrate’s chief financial analyst Greg McBride said, “If you haven’t had a raise in a few years, if you’re still living paycheck-to-paycheck not making any headway, it’s tough to feel like the economy is doing great. The unemployment [rate] is the lowest in 50 years – doesn’t mean that everybody’s got a job, doesn’t mean that everybody’s doing great.” McBride went on to explain that negative consumer sentiment can actually have an impact on economic growth, noting, “Consumers that feel the economy is weak, they’re going to be more hesitant to spend and that can be a headwind to the economy. Business owners that see the economy as weak – they’re not going to hire people, they’re not going to make capital investments and all of that could add up to a collective headwind to economic growth that’s enough to stall out the expansion.”
It’s hard to say for sure when the U.S.’s long expansion will come to a close. Although the majority of economists and experts continue to suggest a recession is still more than a year away, the pessimism that average Americans hold is concerning and could signal an earlier start. So while social issues may dominate the news cycle and campaign trails now, expect the conversation to shift to the economy as the 2020 election cycle heats up.
Also published on Medium.