WASHINGTON -- Americans remain "deeply pessimistic" about the future of the U.S. economy, with a whopping 87 percent saying it's getting worse, according to a Gallup poll.
It's unlikely this number will appreciably decline, even after the economic figures begin to improve. That's because consumer confidence is always a lagging indicator that doesn't turn up until long after the nation's economy has begun to bounce back.
That's bad news for the Republicans, who need to show some tangible evidence of an improving economy in order to blunt the Democrats' portrait of a country mired in recession, or even worse.
The country isn't in a recession as it is commonly, if somewhat arguably, defined: two consecutive quarters in which the economy has stropped growing. In the first quarter of 2008, the economy did grow, but only just; it inched upward by an anemic .9 percent. Economists expect growth in the second quarter to come in at around 1 percent or more, moving higher in the second half. But such definitions prove meaningless to people who have lost their jobs or are struggling to make ends meet amidst $4-a-gallon gasoline, higher food bills and a troubled economy.
In 1980, when Ronald Reagan said the country was in a depression, he drew ridicule from Jimmy Carter's advisers, who said he didn't understand the definition of that term. At a Labor Day campaign kickoff rally of immigrants near the Statue of Liberty, Reagan said, "Well, if it's a definition he wants, I'll give him one. A recession is when your neighbor loses his job. A depression is when you lose yours. Recovery is when Jimmy Carter loses his."
Still, it is worth making the argument that the nation is not in a recession, not when the economy is still growing (albeit slowly), the unemployment rate remains relatively low, at around 5 percent, and American exports are hitting new highs. The economy will probably begin pulling out of its tailspin this summer. Indeed, there are promising signs the turnaround has already begun.
Last week, the Commerce Department reported that new home sales rose 3.3 percent in April, to a seasonally adjusted rate of 526,000 units. This unexpected increase came after months of steep declines in sales, suggesting that a turnaround could be imminent.
The Commerce Department also said that durable goods orders slipped by a smaller-than-expected 0.5 percent. When transportation orders were excluded, factory orders increased 2.5 percent, the largest such increase in nine months. Notably, factory orders for electrical equipment and appliances rose by 27.8 percent, the biggest increase on record.