A new Gallup poll finds that more than half of Americans believe the economy is still in a recession or a depression, although it's actually experiencing a moderate recovery. The poll finds that 26 percent of people believe we're undergoing a recession, and 29 percent believe it's a depression, for a combined 55 percent. Meanwhile, 27 percent of people say the economy is growing.
To us, this sounds like maybe not every one of the respondents is familiar with how the terms "recession" and "depression" are used by economists. (A common but not universal definition of a recession is two consecutive quarters of decline in real GDP. There's no hard-and-fast definition of a depression, but it's sometimes classed as a recession that lasts more than three years, or an occasion where real GDP falls by more than 10 percent.) It's common enough to hear people throw around the word "recession" casually, as in, "Man, did you hear Jerry got laid off? But what are you gonna do, right? We're in a recession."
Still, it's not like Americans don't have perfectly valid reasons for feeling squeezed. Gallup cites "surging gas and food prices." Douglas McIntyre at 24/7 Wall St. adds "the rise in retail prices" as another reason for consumer dissatisfaction--not to mention "home prices and long-term joblessness." McIntyre adds, somewhat grimly, that "it is hard to make a case that the economy can recover to any significant extent when so many people believe that it has not recovered at all."
If it's true, as McIntyre suggests, that a negative perception about the health of the economy is all it takes to keep the economy unhealthy, then it's worth asking once again how President Obama plans to handle the issue when he starts his reelection campaign in earnest. It's long been speculated that a lackluster economy could be Obama's fatal weakness in 2012. But maybe the economy doesn't even have to be bad--maybe enough people just have to believe it is.