The government's estimate of economic growth was recently revised downward, representing the latest in a series of mixed messages about the economy's health. So what do you think? Is the economy on the mend, or having a relapse?
According to a poll by MoneyRates.com and GetRichSlowly.org, visitors to those sites have gotten slightly more optimistic over the past year. This is in contrast to government figures, which indicate that actual growth has slowed over the same period.
The government's vs. the people's take on the economy
The most recent MoneyRates.com/GetRichSlowly.org poll garnered more than 3,800 responses. The results were not wildly optimistic, but they did show an improvement over a year ago. In contrast, government figures suggest that the economy may be slipping a bit.
The Bureau of Economic Analysis released its second estimate of fourth quarter, 2010 Gross Domestic Product at the end of February, and this figure showed a downward revision in the economic growth rate. What had been originally estimated as 3.2 percent growth is now pegged as 2.8 percent.
Does this change matter? In context, it does. It paints a picture of an economy that is stagnating rather than gaining momentum. The corresponding period in 2009 saw GDP grow at a 5.0 percent rate, followed by 3.7 percent in the first quarter of 2010. Ending the year at 2.8 percent would suggest that the initial bounce-back from the recession has not been sustained.
This impression is reinforced by comparing the third quarter and fourth quarter figures from 2010. Third quarter GDP growth was at a 2.6 percent rate, and the fourth quarter is now estimated to have been at a 2.8 percent rate. In short, the economic growth rate may be flatlining rather than moving upward.
In contrast, 30 percent of respondents to the GetRichSlowly.org poll showed some measure of optimism about the economy, up from just 19 percent a year earlier. The number of pessimistic responses declined, from 36 percent in early 2010 to 32 percent in early 2011.
Those trends suggest improvement, but the mood is still cautious. In both early 2010 and early 2011, the most popular response was that the economy was stagnant. This was the assessment of 45 percent of respondents in early 2010, and 38 percent of respondents in early 2011.
So which do you believe--the government's figures, or these poll results? You could make a case either way. Government figures are based on hard data, but are backward-looking. Poll results are based on personal impressions, but these can influence behavior going forward.
Ultimately, if you are waiting for the best CD rates, savings account rates, and money market rates to start reflecting more economic optimism, what matters most is not the government's take on the economy, nor the public's, but the outlook of bank executives.
This post originally appeared at money-rates.com.