Slower Growth Ahead

Posted by: on February 24, 2010

The Optimism Meter fell one point, to 45, during the week ended Feb. 23, as the share of Americans who say they think the economy is getting worse increased from 34% to 40%.

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: REDUCED SPEED

HIGHLIGHT: Bloomberg’s survey of 57 economists estimates that U.S. gross domestic product will expand by 3% a year in both 2010 and 2011. Two-fifths of respondents think the economy will get worse, while only 23% see improvement ahead.

JOBS: OUTLOOK IFFY

HIGHLIGHT: Forty-nine 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 up from 41% one week earlier. Economists predict that unemployment will average 9.1% in 2011, down from an average 9.8% in 2010.

EQUITY MARKETS: CALMER WATERS

HIGHLIGHT: The volatility of the Standard & Poor’s 500-stock index continued its year-to-date decline over the past week. Just 20% of individuals expect the stock market to fall over the next 12 months.

REAL ESTATE: STILL IMPROVING

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