Americans Less Gloomy on Economy Amid Discontent, Poll Finds

By Matthew Benjamin

Aug. 21 (Bloomberg) -- Americans are slightly more optimistic about the economy even as large majorities disapprove of the country's overall direction and President George W. Bush's performance, the latest Bloomberg/Los Angeles Times poll shows.

For the first time since January 2007, Americans who say the economy will improve in the next six months outnumber people who say it will get worse, by 28-to-21 percent. A bigger group, 45 percent of those surveyed, says it will stay about the same.

``Americans may be less gloomy because they're seeing gas prices fall below $4 in many places, giving them some hope the economy may be back on track,'' says Susan Pinkus, the Los Angeles Times polling director.

Consumer confidence is inching up from 28-year lows: The Reuters/University of Michigan preliminary index of consumer expectations rose in August to 56.8 from 53.5. The index measures consumers' outlook for personal finances and the economy.

Economists say the retreat in gasoline prices stopped the confidence free fall, although rising unemployment, declining home values and tight credit make it likely that consumer spending will stagnate in the next quarter.

Wrong Track

Overall, about three of every four people in the Bloomberg/Los Angeles Times survey say the U.S. is on the wrong track; only 18 percent are satisfied with the country's direction.

About seven of 10 poll respondents disapprove of the way Bush is handling his job, compared with 25 percent who approve. The president's rating barely exceeds President Richard Nixon's 24 percent approval in a Gallup Poll conducted the week before his August 1974 resignation over the Watergate scandal. Bill Clinton's approval rating among registered voters stood at 61 percent in September 2000.

Independents, crucial to the presidential chances of both Democrat Barack Obama and Republican John McCain, are more pessimistic than Democrats or Republicans. About half of non- aligned respondents see the economy staying the same, with the rest split evenly over whether it will get better or worse.

``We were just notified that natural-gas prices in our area will go up,'' says Heidi Artise, 48, an independent voter whose husband has found only occasional jobs as a maintenance worker over the past year. ``I don't see many future prospects for me and my family,'' says Artise, who lives in the town of North East, Pennsylvania, on Lake Erie.

Assessing the Economy

Among respondents of all political persuasions, the number of Americans who say the economy is doing badly fell slightly since a poll two months ago. About three out of four people now say the economy is in bad shape, compared with 82 percent in June -- the worst assessment in 15 years. Respondents who say the economy is doing ``very badly'' dropped 6 percentage points, to 44 percent.

``The stimulus package has helped people and the price of gas is going down, so I think things will start getting better for a lot of people,'' says Alexandra Westover, a poll respondent from Springfield, Oregon. The 26-year-old Republican voter runs a family business selling doors and frames. ``We have never been busier, so that's got to be a good sign,'' she says.

In June's poll, by contrast, only 18 percent of respondents expected the economy to improve in six months' time, 31 percent said it would get worse, and 45 percent expected conditions to stay the same.

The improvement in Americans' economic outlooks since June accompanies a tightening of the presidential contest. Obama edges McCain 45-43 percent, a statistical dead heat, in a match-up excluding third-party candidates. In June, Obama led McCain 49-37 percent.

`Could Help McCain'

``If this trend increases and people start opening up their pocketbooks, it could help McCain, since Obama is now winning on the economy and gas-price issues,'' Pinkus says.

Black Americans report more acute economic pain than the overall population. Almost six out of 10 blacks surveyed say the economy is doing very badly, compared with a little more than four of 10 whites.

The Aug. 15-18 poll of 1,375 adults nationwide had a margin of sampling error of plus or minus 3 percentage points.

High energy prices are a growing source of discontent. Almost three-fourths of poll respondents say they're suffering financial hardship because of the costs of oil and gas. A higher proportion of blacks -- 83 percent -- say energy prices are troubling them. Two months ago, when an average gallon of gasoline cost about 36 cents more, seven in 10 Americans called fuel prices a hardship.

The expense of cooling his home, and the expected costs of heating it this winter, are becoming problems for Doug Wollenburg, 46, an independent voter in Lincoln, Nebraska. Wollenburg, who worked in slaughterhouses before he became disabled, says Congress and Bush aren't providing solutions.

``They'll wait until the bogeyman barks to do something about it,'' he says.

To contact the reporters on this story: Matthew Benjamin in Washington at mbenjamin2@bloomberg.net.