According to Gallup, attempts to distract the US population with trivial side stories is failing spectacularly, as 74% of survey respondents have responded that the economy is the "most important problem" facing America today, which is the highest percentage in two years, and since the market lows in March 2009. So even as the market has doubled, this appears to have done little for the average American who is now more concerned about the true "economy" than ever since the Great Financial Crash, and not merely the one indicated by the Russell 2000. Chalk one more failure to Ben's attempt at forcing the wealth effect upon the great unwashed.
Gallup has been asking Americans the most important problem question on a monthly basis since 2001. Economic issues began to dominate Americans' concerns in 2008 as the financial crisis unfolded, and rose to an all-time high of 86% in February 2009. Since then, Americans have still generally been more concerned about economic matters than non-economic ones, although the percentage naming economic concerns did fall for much of 2009 before creeping back up in 2010 and 2011.
Main concerns are the economy, jobs, and the price of gas, not the S&P
General economic concerns (35%) and unemployment (22%) are the specific issues currently at the forefront of Americans' minds. The percentage mentioning the economy in general is up significantly from 26% in April, while unemployment is up just slightly from 19%.
Twelve percent of Americans mention the federal budget deficit or federal debt as the nation's most important problem, down from 17% in April, although still high on a historical basis. The April reading was the highest Gallup found since 1996.
Mentions of gas prices are up to 8% in the May 5-8 Gallup poll, the highest in nearly three years.
Oddly enough, even now people don't rush to blame the government:
The leading non-economic problem -- dissatisfaction with government -- lags way behind Americans' top economic concerns, at 8%. Mentions of dissatisfaction with government are down from 13% in April, likely the result of the rally in support for President Obama and Congress after the killing of Osama bin Laden.
This will be sure to change next week when the death of Al Qaeda leader is forgotten.
Gallup's bottom line:
While Republican and Democratic lawmakers in Washington are desperately seeking common ground on the federal budget deficit and debt issue -- the United States will reach its borrowing limit Monday -- Americans are worried primarily about the economy and jobs. If Congress fails to raise or delays raising the debt limit, it could cause economic problems for the country, but Americans may not fully understand these consequences and may instead be prioritizing the issues that are affecting their current daily lives.
Although U.S. job creation reached a 2 ½-year high in April, Americans are still highly concerned about unemployment, underscoring the extent to which the recession devastated the job market. Further improvement on the jobs front -- which is closely tied to spending and economic confidence -- may be needed before Americans' priorities on the nation's top issues shift away from the economy.
Perhaps it is time for the Fed to shift the popular rhetoric of QE as a means of raising to stock market to one of job creation, the same pretext used back in March 2009. This will be especially needed in advance of QE3 now that the labor participation rate is expected to jump and the narrow unemployment rate will likely move from 9% to double digits once again.