THE TIMES POLL : Crumbling Confidence : Survey Finds Economic Optimism on the Wane

Public confidence in the U.S. economy, which had sprinted ahead late last year, has eroded markedly by some key measures in the last four months, according to a new Los Angeles Times Poll that underscores lingering doubts about the recovery.

Compared to earlier this year, a larger number of Americans now expect unemployment to worsen and the economy to deteriorate in the coming months, the poll shows. Just 17% of those surveyed expect the jobs picture to improve soon. In a February Times poll, 30% took the upbeat view.

Similarly, a meager 16% predict the overall economy will get stronger in the near future. By contrast, 28% of Americans were optimistic earlier this year.

Other gauges, such as people’s assessments of the economy right now, suggest that public optimism has leveled off following a sharp climb last autumn.

“I don’t think it’s good news,” said John Brennan, director of the Times poll. “The public’s current ratings of economic conditions are about where they were in February, and expectations for employment and the economy generally have turned downward.”

The Times’ national survey of 1,474 adults was conducted June 12-14. It has a margin of sampling error of plus or minus 3 percentage points.

Attitudes on whether or not a recession still grips the country vividly illustrate the change in the psychological climate. Officially, the U.S. recession ended two years ago, although California remains mired in a deep slump.

In October, shortly before the presidential election, only 9% of respondents said there was no recession at all. But by February the optimistic group had expanded to 30%. Now, however, the progress has stopped; 26% say there is no slump, a response that is marginally worse than earlier this year.

Similarly, the percentage that describe the economy as “robust” has stagnated or even slipped slightly from the level of several months ago. In February, for instance, 20% agreed that the economy was robust. In the new poll, the figure was down to 16%.

Earlier this year, 77% described the economy as “shaky.” The new poll found that 83% hold that wary view.

However, attitudes have not declined to the low levels of last summer, when many more Americans believed the economy was in a serious recession.

At the household level, people’s descriptions of their personal finances have stayed about the same for months. About 60% say their budget situations are secure--virtually equivalent to the 57% finding in January. Meanwhile, 39% describe their own finances as shaky, essentially equal to the 37% in February.

While the Times poll did not ask these questions in March, April or May, other surveys also point toward an erosion of consumer confidence so far this year.

Continuing surveys by ABC News/Money magazine, for instance, point to a downward trend since January in the number of people who believe the economy is getting better. Similar trends have been detected in other polls, such as those of the Conference Board in New York, which found in May that confidence had dropped to the lowest levels since last fall.

Some analysts have chalked up the erosion to perceptions that President Clinton was stumbling, rather than a new slowdown in the economy, because the national recovery has stayed alive this year, if unimpressively.

Still, the recovery’s disappointing pace and the continuing layoffs in corporate America remain a source of widespread anxiety. Concern over jobs towered above all other economic issues, the Times poll found.

About 40% of those surveyed said unemployment is the nation’s chief economic problem. Worries about the deficit are paramount for just 16%, while 11% cited health care and 10% named government waste as the country’s worst economic trouble.

THE TIMES ECONOMIC INDEX

June Swoon for Economic Confidence

Public expectations for the U.S. economy have weakened since February, according to a recent Los Angeles Times Poll.

Americans increasingly think the employment picture will worsen in the months ahead, while only a small percentage think the situation will get better.

THE NATIONAL OUTLOOK: Do you think we are in a recession? If so, is it mild, moderate or serious?

No 26% 30% 10% Mild 18% 15% 12% Moderate 27% 25% 33% Serious 25% 25% 42% Don’t know 4% 5% 3%

THE ECONOMIC OUTLOOK: How do you expect the nation’s economy to be performing three months from now?

June ’93 Feb. ’93 July ’92 Better 16% 28% 19% Worse 23% 15% 22% Same 58% 52% 54%

THE JOB OUTLOOK: In you area, what will the unemployment situation be like in three months?

June ’93 Feb. ’93 July ’92 Better 17% 30% 19% Worse 25% 16% 27% Same 55% 52% 50%

Note: Numbers do not add up to 100 because “don’t know” responses are not shown. HOW THE POLL WAS DONE: The Times Economic Index is based on a set of questions asked regularly by The Times Poll to measure Americans’ feelings about the strength of the economy. The questions include measures designed to gauge the current situation plus predictor questions that seek the public’s assessment of conditions three months in the future. The latest survey was conducted June 12-14 among 1,474 adults nationwide. The margin of sampling error is plus or minus 3 percentage points.