Persistent job losses seem to be taking a toll on how Americans view President Obama's performance in handling of the economy and federal budget.
In a July IBD/TIPP Poll, a majority of respondents asked to grade the president's handling of the economy gave him a grade of C or below.
In the same poll, the IBD/TIPP Economic Optimism Index tumbled 4.5 points, or 8.9%, in July, down to 46.3 vs. 50.8 in June. Index readings above 50 indicate optimism, below 50 indicate pessimism.
The study indicates that 21% of respondents gave Obama a C for his handling of the economy, 16% gave him a D and 19% gave him an F. The president received an A grade from 13% of respondents; 30% gave him a B.
The public's perception of the president's management of the budget is even harsher, with just 33% giving him an A or B and 62% grading him average or below.
Most troubling to the president is the perception of self-identified independents, 62% of whom gave him a C or below for his handling of the economy, with 68% giving him average or poor grades for managing the budget.
This month's Economic Optimism Index is exactly at its 12-month average of 46.3, just 1.9 points above its reading of 44.4 in December 2007, when the economy was entering a recession. The index is 4.9 points below its all-time average of 51.3.
All three components of the IBD/TIPP Economic Optimism Index fell in July:
- The Six-Month Economic Outlook, a measure of how Americans feel about the economy's prospects in the next six months, declined 6.5 points, or 12.6%, to 45.2, still 13.1 points above the December 2007 figure.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, fell 2.1 points, or 3.9%, to 52.1.
- Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, fell 4.9 points, or 10.6%, to 41.5.
The June employment report estimated monthly job losses at 467,000, putting total losses since the beginning of the recession at more than 7 million.
In an effort to allay deepening concerns, the president wrote an op-ed in Sunday's Washington Post defending his $787 billion stimulus plan and asking Americans to be patient.
"The American Recovery and Reinvestment Act was not expected to restore the economy to full health on its own, but to provide the boost necessary to stop the free fall," Obama wrote. "So far, it has done that. It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall."
The president expects the stimulus plan to create or save 4 million jobs. Some Republicans have noted that the stimulus plan has failed to contain job losses.
"We must let it work the way it's supposed to, with the understanding that, in any recession, unemployment tends to recover more slowly than other measures of economic activity," Obama wrote.
While debate on the efficacy of the first stimulus continues, talks of a possible second stimulus emerged last week (see editorial on the previous page for poll data and analysis).
Despite deteriorating confidence levels, positive signs appeared in the economy. The June purchasing agent surveys echoed those that previously appeared on the eve of past economic recoveries, and the Conference Board's CEO Confidence Index showed optimism.
Some experts view the slump in confidence this month as an idiosyncracy. These observers think confidence will likely bounce back in coming months and we are on track for a recovery in the second of half of this year.
Mayur is president of TechnoMetrica Market Intelligence, which directs the IBD/TIPP Poll that was the most accurate in the 2004 and 2008 presidential elections.