Friday, August 8, 2014

Improvement of American Economic Impressions and Inherent Risks to Sustainability

An August 5th poll by PEW shows how Americans are having an improved perception of the economy but is unsure of how beneficial it will become. The study uses 1002 adults to gauge their perception of the economy and what it means to them. Whether this impression will continue will depend on whether they realize benefits in their opportunities, income, earning power, and social networks. 

At present Americans 10% hear mostly good news, 24% mostly bad news, 64% mixed news and 3% not sure.  The vast majority of Americans are unsure if the economy is really improving or if it will have positive impact on them. They are becoming more optimistic but with a recession full of skepticism to overcome. 

Despite the mixed results there have been some improvements since a similar poll in February. The amount of people hearing positive news increased 5%, those hearing bad news dropped 9%, while mixed news increased 4%. There appears to be an adjustment going on that will impact consumer behavior in terms of purchasing, seeking employment, and savings rate that could support sustained growth.

Hearing about the economy from media and politicians does have an impact on how people perceive the economy but is not the final word. These words will only have so much meaning unless it impacts their employment opportunities and chances to earn living wages. People must experience the same phenomenon in their personal lives and hear confirmation of improvement in their social networks. 

They are more optimistic about jobs with 20% hearing good news, 34% bad news, 41% mixed news, and 4% don’t know. That is an improvement since January with an increase in 8% hearing good news, a decrease in 8% hearing bad news, a decrease in 3% hearing mixed news and an additional 1% unsure. 

The results of the study are limited by their sample size but offers a small glimpse of what could be improvement of perception of the economy by Americans. Lasting positive impressions will only occur if the continued news is confirmed within the way they live their lives and among the people they associate. 

That proof comes in varying forms but is often seen through employment and wages. It can also be realized in earning power as it relates to prices of everyday items such as gas, household products, rent/mortgage and food. If these prices rise and cut their spending and saving potential the overall impact will be muted and short lived. 

That should be the end goal. Americans want to see improvement on the ground level. The recent news of growth is less than a year old and benefits on the corporate level may not have yet trickled down to the masses. This financial boost will be a major sticking point with people. If opportunities do not both improve upon the profit margins of companies and the livelihoods of people than their impression will change again and the positive news seem more like wishful thinking.

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