Inflation Staggers Public but Economy Still Seen As Fixable

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Pew Research

July 31, 2008

The public continues to be extremely downbeat about the national economy. Just 10% say the economy is in good shape, while 72% say the economy is either in a recession (54%) or a depression (18%). On a personal level, concerns about rising prices have surged. Beyond widespread anxiety about energy costs, a growing number of Americans say it is difficult for them to afford food.

The percentage of Americans who cite rising prices as the nation's most important economic problem has nearly doubled since February - from 24% to 45%. Nearly two-thirds (64%) now say their incomes are not keeping up with the rising cost of living, which also is up substantially from February (58%). The number saying it is difficult to afford food has followed a similar upward path; 38% say that now, compared with 27% five months ago.

While rising costs are clearly the top economic problem in the public's view, it is far from their only concern. More than seven-in-ten (73%) say good jobs are difficult to find, compared with 55% a little more than a year ago (June 2007). The proportion saying that local real estate prices are declining has jumped since February, from 41% to 56%.

Affording Necessities

For many Americans, it is getting harder to afford some of life's most basic necessities. As was the case earlier this year, majorities now say it is difficult to afford gasoline (68%), retirement savings (59%), and taxes (52%). In addition, nearly half of the public says it is difficult to afford home heating and electric bills (49%) and health care costs (46%). While most Americans still say it is easy to afford food, the percentage saying this is difficult for them has risen dramatically since February. Currently 38% say it is difficult to afford food, up from 27% in February.

But Most Expect Prices to Rise

Looking to the future, however, people are somewhat optimistic. More than half of Americans (54%) expect home prices to increase over the next few years. That is little changed since February, when 55% expected prices to rise.

Prospective views of the local real estate market vary little between homeowners and non-homeowners. However, among homeowners, somewhat more who have mortgages expect prices to rise than do people who own their homes outright (59% vs. 49%).