What a Difference a Year Makes

Posted by: on April 1, 2010

The Optimism Meter dropped to 52 on Mar. 30, down from 54 one week earlier. The current reading is nearly double the level logged one year ago, as U.S. stocks were just beginning to rally. Since then, the share of Americans who believe the economy is getting better has improved by 77%.

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: HERE TO STAY?

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. Thirty-eight percent of respondents think the economy is getting worse, and only 23% see improvement ahead.

JOBS: SIGNS OF IMPROVEMENT

HIGHLIGHT: Forty-four 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 47% one week earlier. Economists predict that unemployment will average 9% in 2011, down from an average 9.6% in 2010.

EQUITY MARKETS: A LOT LESS RISKY

HIGHLIGHT: The volatility of the Standard & Poor’s 500-stock index continued its year-to-date decline over the past week. Just 22% of individuals expect the stock market to fall over the next 12 months.

REAL ESTATE: NO PICK-UP YET

HIGHLIGHT: Fifty-four percent of YouGov survey respondents say they believe their homes won’t lose value over the next year. Twenty-eight percent think real estate has yet to hit a bottom.