Americans Pessimistic About Biden Economy
A new Rasmussen Reports national telephone and online survey finds that 41% of American
Adults say the U.S. economy will be weaker a year from now. Thirty-seven percent (37%) say the economy will be stronger in a year, and 13% expect it to be about the same.
This lack of confidence in the future of the economy is reflected in the National Federation of Independent Business small business optimism index: Small business confidence has hit an eight-month low.
The NFIB Small Business Optimism Index declined in January to 95.0, down 0.9 from December and three points below the 47-year average of 98. Owners expecting better business conditions over the next six months declined seven points to a net negative 23%, the lowest level since November 2013. The net percent of owners expecting better business conditions has fallen 55 points over the past four months.
Meaning the downward trend started after the November 2020 election of Joe Biden.
Key findings include:
The NFIB Uncertainty Index decreased 8 points to 82.
The percent of owners thinking it’s a good time to expand decreased 4 points to 8%.
Sales expectations over the next three months declined 14 points to a net negative 4%.
Earnings trends over the past three months declined 7 points to a net negative 14% reporting higher earnings.
A net negative 7% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down 5 points from December. The net percent of owners expecting higher real sales volumes decreased 2 points to a net negative 6%, overall, not a positive picture.
The frequency of reports of positive profit trends decreased 2 points to a net negative 16% reporting quarter on quarter profit improvement. Among owners reporting lower profits, 43% blamed weaker sales, 17% cited the usual seasonal change, 6% cited a higher cost of materials, 6% cited labor costs, and 5% cited lower prices. For owners reporting higher profits, 60% credited sales volumes, 17% cited usual seasonal change, and 8% cited higher prices.
However, small business owners did report potential increases in hiring and compensation which are potential bright spots for employees in the otherwise grim outlook.
“As Congress debates another stimulus package, small employers welcome any additional relief that will provide a powerful fiscal boost as their expectations for the future are uncertain,” said NFIB Chief Economist Bill Dunkelberg. “The COVID-19 pandemic continues to dictate how small businesses operate and owners are worried about future business conditions and sales.”
The pessimism among small business owners found by the NFIB and Rasmussen’s consumer survey is similar to what the Gallup Organization reported in its latest economic report, “Americans' Views of Their Financial Situation Worsen.”
Gallup found that:
35% say they are financially better off than a year ago, down 24 points
63% think they will be better off one year from now, down 11 points
Democrats more optimistic than Republicans about finances improving in 2021
Gallup’s findings represent a crash in optimism from the height of the Trump economic boom in December of 2019 – January 2020, when they were at or near record highs in Gallup's trends. Nearly six in 10 Americans (59%) said they were better off financially than they were from the year previous, up 50% from 2018.
Now, the percentage of U.S. adults who say they are now financially better off than they were a year ago has tumbled 24 points to 35%, the lowest reading since 2014. At the same time, 36% say they are worse off and 28% volunteer that their situation is the same.
These latest findings, from a Jan. 4-15 Gallup poll, are consistent with Americans' current negative views of the national economy.
Gallup also found that Americans across all key demographic groups have become less likely to say they are better off financially than they were last year; however, adults aged 18-34 and Republicans have seen the largest declines (32 percentage points each) since 2020. Still, Republicans remain more likely than Democrats to say they are better off.
Although their ratings have declined by double digits, U.S. adults with annual household incomes of $100,000 or more are the most likely group to say they are better off (50%), while those with household incomes under $40,000 are least likely (at 23%) to say the same. Relatively low percentages of women (29%), Democrats (29%) and adults who are not currently employed (28%) report that their financial situations have improved.
A year ago, at the height of the Trump economy, Americans could look back and most believed they had never had it so good. Now, a year after the Red Chinese attack on our economy and the inauguration of a job-killing new Democrat administration, economic confidence has crashed with only 35% of Americans optimistic about their future and small business optimism at the lowest level since November 2013.
Biden approval rating
NFIB small business optimism index