Auto sales are up. Unemployment is down. The stock market has been rising. Still, the housing market remains stagnant and millions can’t find work. So how do Americans really feel about the economy? It’s a critical question, especially as a presidential election campaign looms.
Two surveys released today suggest that Americans are indeed feeling a little more confident about their economic prospects for the remainder of 2012. Gallup said its estimate of consumer economic confidence has risen to its best level since early 2008, and investment firm John Hancock’s quarterly investor survey showed improving investor expectations.
The Gallup Economic Confidence Index (ECI) now stands at –20, an increase from February’s –22 score, and a huge improvement from last August’s –52 score, taken during the political tussles over the federal budget. The ECI combines assessment of current conditions and expectations for the future obtained through telephone interviews with more than 15,000 randomly chosen U.S. residents in March. Gallup noted that high-income earners and Democrats had sunnier views of the economy compared to lower-income earners and Republicans.
John Hancock’s first-quarter Investor Sentiment Index, which surveyed more than 1,000 U.S. investors in February, found their outlook rose to a score of +21 during the first three months of 2012, up from +15 in the last quarter of 2011. The company said the rise in confidence reflected higher expectations for stocks and mutual fund performance.
According to Hancock, 56% of surveyed investors expect continued stock gains in 2012. Almost as many, 54%, anticipate improved mutual fund results. Investors professed favorable outlooks on technology, energy and health care stocks. An overwhelming 77% consider it the right moment to resume retirement planning and investment. Respondents also sounded positive about personal finances, with 43% saying they were in a better financial position now than last year. Almost 60% said they expect to be better off in 2014.
“Economic indicators suggest the internal dynamics of the U.S. economy look pretty good right now, and investors appear to be in sync with that,” said Bill Cheney, John Hancock’s chief economist commented in a company statement.
Still, concerns about the economy linger. 44% of respondents remain worried about high unemployment levels, though that’s down from 54% in late 2011. Respondents also expressed concern about rising health care and energy costs and the swelling national debt. A third of respondents anticipated inflation rising to 4% or more by 2014.