Economy Is Already Collapsing, Majority of Americans Believe

KATHERINE FUNG 

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More than half of Americans think the U.S. has already entered a recession, new polling shows.

The latest IBD/TIPP Economic Optimism Index published on Friday found that 53 percent of Americans think the economy has gone into a recession, and 25 percent say they're unsure. Only 20 percent believe the country is not in a recession.

Even amid uncertainty, concerns have dramatically risen over the last month. Back in May, less than half of Americans—48 percent—said the economy was in a downturn while 23 percent said the U.S. was not in a recession.

Recession fears have surged in recent weeks, with inflation reaching a 40-year high last week and the Dow Jones Average falling below 30,000 for the first time in a year and a half on Thursday.

The share of Americans who believe the U.S. is in a recession crossed the 50 percent mark this month. People walk by the New York Stock Exchange (NYSE) on June 14, 2022 in New York CitySPENCER PLATT/GETTY

This week, the U.S. entered a bear market for the first time since 2020, marking the first bear market of President Joe Biden's presidency. The term "bear market" is used when a stock market drops by at least 20 percent for an extended period, signaling an economic slump.

The new poll also suggested that most Americans don't think the economy will improve any time soon.

Only two in 10 Americans think that things are on the way up—the lowest confidence rating recorded when analyzing the index's monthly reports dating back to January 2021.

The nation is also concerned by Biden's ability to handle the economy. Even Democrats lack confidence in Biden, with only 45 percent giving the president a good grade—a precipitous decline from this time last year when 80 percent of Democrats thought he was doing a good job of handling the economy.

The poll also found that more than eight in 10 Republicans and nearly 6 in 10 Independents give Biden a failing grade on the economy.

These numbers could spell trouble for the Democrats, who will be hoping to hold onto as many congressional seats as they can in November when the GOP plans to take back the House.

Recent polls indicate that inflation and rising prices are a top issue for most Americans, with more than eight in 10 saying that the economy will be a key issue in determining how they'll vote in the midterm elections.

And if the state of the economy remains precarious after the midterms, a re-election win for Biden may be even more difficult than it already is.

"If inflation isn't marginally better by 2024, the Democrats will be forced to swim upstream against an electorate that is financially pressed," Brandon Rottinghaus, a political science professor at the University of Houston, previously told Newsweek. "That's never a good position for an incumbent party to be in."