If you think the economy isn’t doing well, you’re not alone — but experts say you’re wrong.
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A new survey from financial information website Bankrate.com found that everyday Americans have a less favorable view of the economy than experts do. All the experts rated the economy as being “excellent” or “good,” compared to just 59 percent of others. And 39 percent of everyday Americans said the economy was “not so good” or “poor.”
Bankrate surveyed around 1,000 people and nine economic experts for the study.
Americans’ political views and their income appeared to impact their view on the economy. The survey found that Republicans were much more likely to say the economy is excellent or good — 77 percent — which Democrats were evenly split between "excellent or good" and "not so good or poor."
“The stark contrast between everyday Americans’ assessment of the economy and what data say about the economy highlights the risk of ‘talking ourselves into a recession,” said Greg McBride, a chief financial analyst for Bankrate. “Consumers that think the economy is weak will spend less and business owners that think the economy is weak won’t hire more people.”
Everyday Americans also said they expect a recession to hit sooner than the experts predict. A fifth of Americans polled said they believe the recession has already begun, and 21 percent said they expected it to begin within six months or a year. However, all the experts said they don’t expect a recession to begin for either one to two years or more than two years.
Political views also appeared to impact Americans’ expectations for a recession. Democrats were almost twice as likely as Republicans to say a recession has already begun, while the largest number of Republicans — 35 percent — said a recession is two or more years away.
While people were more likely to see a recession coming soon than the experts, they aren’t necessarily prepared for financial instability. More than half of everyday Americans said they had either no emergency savings or their savings would cover less than three months’ expenses. However, most of the experts recommended having between three and five months’ expenses saved, and some said to save six months’ expenses or more.
While people had less money saved up than the experts recommended, they seemed to be aware they didn’t have enough. More than half of those surveyed said they would need six months worth of savings to feel comfortable.
“Emergency savings creates a moat around your finances for when an inevitable recession arrives,” McBride said. “Now is the time to be boosting savings as waiting until there is a recession will be too late.”