February 11, 2010

Seven-Month Low

The Optimism Meter clocked in at 31 on Feb. 9, down from 45 one week earlier and the lowest reading since last July. Amid elevated stock market volatility, the share of Americans who believe the stock market will be lower 12 months from now increased by 22% over the past week.

Each of the charts that follow measures one of the four different components of the Optimism Meter: economic growth, jobs, equity markets, and real estate. Like the Optimism Meter, the components appear on a scale of 0 to 100, with 100 representing the highest level of optimism.

ECONOMIC GROWTH: CHUGGING ALONG

HIGHLIGHT: Bloomberg’s survey of 57 economists estimates that U.S. gross domestic product will expand by 2.7% in 2010 and 2.9% in 2011. Thirty-eight percent of respondents said they think the economy is getting worse.

JOBS: SLIGHT IMPROVEMENT IN OUTLOOK

HIGHLIGHT: Forty-five percent of individuals say that if they lost their job, it would be very hard to find a new one that paid as much. That’s down from 50% one week earlier. Economists predict that unemployment will average 9% in 2011, down from an average 10% in 2010.

EQUITY MARKETS: THE RETURN OF RISK


HIGHLIGHT: The volatility of the Standard & Poor’s 500-stock index has increased in recent weeks. Thirty percent of individuals expect the stock market to rise over the next 12 months.

REAL ESTATE: THINGS ARE LOOKING UP

HIGHLIGHT: Sixty-two percent of YouGov survey respondents said that they believed their homes wouldn’t lose value over the next year. Twenty-seven percent think real estate has yet to hit a bottom.