Just over a week ago, market signals and several analysts suggested that the odds were increasing for a recession in 2020.
Given that 73% of voters consider the economy a very important voting issue, it's no surprise that the new economic assessment quickly generated an intense political debate. President Donald Trump and chief economic adviser Larry Kudlow both made public statements about the strength of the economy.
The political dynamics are pretty straightforward. If the country enters a recession prior to the next election, Trump is unlikely to get reelected, and congressional Democrats could have another big year. On the other hand, if the economy grows stronger and people believe their own personal finances are getting better, the president is a favorite for reelection, and the GOP could have a good year.
So, where do we stand?
The latest Job Creators Network/ScottRasmussen.com Weekly Pulse survey shows that the barrage of news coverage about a possible recession did at least temporarily dent economic confidence. Immediately prior to all the recession chatter, 56% of American adults rated the economy as good or excellent.
This week's update shows that the number offering such an upbeat assessment fell 7 points to 49%. It's only the second time in six months that number has dropped below 50%. And for the first time since the government shutdown ended in late January, more Americans believe the economy is getting worse (33%) rather than better (30%).
The key question is whether these numbers represent a temporary blip brought on by intense media coverage or mark the beginning of an ongoing decline. At the moment, it's too early to tell.
In previous episodes, when confidence has declined due to a specific issue (e.g., government shutdown or tariff threats), it has bounced back as soon as the issue was resolved.
Also, the current numbers include a couple of positive indicators that could form the basis for renewed confidence. By a 29% to 20% margin, Americans believe their own finances are getting better rather than worse. Politically, the way people feel about their personal finances matters more than the way they feel about the economy in general.
On top of that, 44% believe that firms in their area are more likely to be hiring than laying people off. Just 20% believe those firms are more likely to be laying people off.
What people experience in their daily lives matters far more than media coverage. People who work for companies that are hiring people and growing tend to be more optimistic about the economy. Pessimism is more common among those who see colleagues being laid off.
It's obviously true that media coverage can have a short-term impact on economic perceptions. That's why we've seen a 7-point decline in economic confidence this week. But the bigger story is that reality matters more than talking points.
That's why ScottRasmussen.com and the Job Creators Network will continue to monitor the reality each and every week.
Scott Rasmussen is the publisher of ScottRasmussen.com. He is the author of "The Sun Is Still Rising: Politics Has Failed But America Will Not."