US Consumers Acknowledge Onset of Recession

12 February 2008

WASHINGTON, DC: Joe and Josie Public are either more perceptive – or more honest – than America's politicians, many of whom remain in denial that the nation is now in recession.

Moreover, 48% of the US electorate believe the best economic stimulus President Bush can deliver is to quit Iraq.

They are the messages coming over loud and clear in the latest Associated Press-Ipsos poll, carried out between February 4-6,  with 61% of respondents believing the US economy has entered its first recession in seven years.

Reporting the poll results, USA Today also quoted three typical consumers.

"Absolutely," opined Hilda Sanchez (44) of Waterford, California, "we're in a recession. We can't afford the things that we normally buy.

"We are cutting corners in our spending. For our groceries, we are buying a lot of generic and we are eating out less. The way things are, people are afraid of losing their jobs."

While a couple of thousand miles distant in Greer, South Carolina, Jim Sims (60) noted that "for-sale signs are everywhere. In my area, thirty-five to forty homes are standing there and aren't even complete. There aren't any buyers."

And in the heartland of middle America, Nanette Dahlin (52) of Minnesota deemed the situation "very scary".

She tells of friends in nearby Madison who put their home up for sale recently and reduced the asking price by over $100,000 in just a week. "They are in bad shape," she said.

In a TV interview on Sunday, President Bush delivered a penetrating and insightful economic analysis.

"Obviously the housing market is creating deep concern. And one of the real problems could be that if people, as a result of their value of their homes going down, kind of pull in their horns."

Despite which Bush claimed that the US is not in a recession, citing unidentified "experts". He did, however, acknowledge "that the signs are troubling enough" to trigger the $168 billion economic rescue package passed by Congress last week. 

This Wednesday the White House incumbent will sign a bill that includes tax rebates for people and tax breaks for businesses.

Meantime, employment concerns are fueling pessimism about the economy and individuals' own financial health. According to the RBC Cash Index consumer confidence slumped to a reading of 48.5 in early February – the lowest since the index was launched in 2002. 

Terry Connelly, dean of Golden Gate University's Ageno School of Business told USA Today: "People are both depressed and anxious about the state of affairs. The anxiety is going to persist because we are in an uncertain season economically and politically."

Data sourced from USA Today; additional content by WARC staff