StrategyOne Survey: Two-thirds of Americans expect double-dip recession, brace for second hit worse than the first
Public fearful about prospects for economic recovery
Almost half see America’s ‘best days’ behind us, 7 in 10 concerned country is ‘fundamentally broken and not working’
September 9, 2010 (New York, NY) — Almost two in three Americans (65%) say a double-dip recession — defined as a recession followed by a short-lived recovery, followed by another recession — is now likely to happen. Among those who expect a double-dip recession, nearly half (44%) fear it will be worse than the first one, with 21% worried it will be “much more severe.” Just 24% think the second recession will be less severe.
These findings come from a recently conducted survey of 1,043 Americans by the polling firm StrategyOne, a Daniel J. Edelman company.
As they are bracing for a second downturn, Americans are certainly not holding their breath for a full recovery coming anytime soon. Just 5% think there will be a full economic recovery by the end of this year, and only another 21% see recovery taking place by the end of 2011. Half of all Americans polled (50%) see a recovery not coming until sometime after the end of 2011, and about a quarter (23%) doubt our economy will ever fully recover.
But beyond feelings about where the economy is today and where it is heading next, fundamental doubts and concerns are being raised about America. The country is split on whether America’s best days lie ahead of us or behind. A slim majority, 52%, say they are ahead of us, while 48% say they are behind us. There is however consensus around another point – 71% agree that America is fundamentally broken and not working.
“The American public — characteristically optimistic and resilient — is looking around and seeing more and more dark storm clouds approaching on the horizon,” said Bradley Honan, senior vice president of StrategyOne. “Not only has confidence in the economy been severely undermined, there are now real, significant doubts emerging about our country.
The clearest implication is that going forward, consumers are expected to be a lot more frugal. With consumers accounting for nearly two-thirds of economic activity in the country, this is indeed a worrisome trend.
Facing a scary and uncertain financial future, Americans are watching their wallets:
· 41% are planning to cut back on their spending over the next 3–4 months, compared with 8% who plan to increase it.
· 35% say they will plan to cut back their online spending over the next to 3–4 months, compared with 12% who plan to increase it.
· 79% say they are planning to spend less money for Christmas this year.
· 87% say they do not plan to make a big-ticket purchase (such as a house or car) in the next 3–4 months.
· 49% have already delayed making a big-ticket purchase during the past few months.
· 26% of Americans don’t expect their personal finances to fully recover from the downturn until after 2011, and just as many (26%) think their personal finances won’t ever fully recover.
"As we enter the 34th month since the ‘Great Recession’ began, we see the mind-set of consumers turning even more cautious and conservative than what we have seen previously,” said Honan. “The consumer economic engine which drives our growth is either stalled or stuck in first gear. Until consumers feel more confident and are willing to spend more freely, growth will likely be anemic at best.”
StrategyOne conducted 1,043 online interviews among a representative sampling of Americans between August 20 and 23, 2010. The margin of sampling error at the 95% level of confidence is = +/- 3.03% overall and larger for subgroups. Statistical weights were designed from the United States Census Bureau statistics.