The Economy: Are You Better Off This Election Day?

Nov. 7, 2006 — -- The economy is always one of the top issues of importance to voters. In polls this year it ranks second only to Iraq.

Ask Republicans about the economy and you'll hear that "it's going gangbusters," as Vice President Dick Cheney said over the weekend on "This Week with George Stephanopoulos." But if you ask Democrats about the economy, you'll likely hear a litany of examples of the ways working families have fallen behind financially.

So here are some quick facts to help sort through the spin:

While the big picture was indeed "going gangbusters" at the beginning of the year, the cooling of the housing market and a summer of $3 gas delivered a gut punch to growth that pushed third quarter gross domestic product to unexpectedly slow levels.

Declines in the housing market and in manufacturing will continue to be a drag. But most economists hope that the worst of the slowdown is behind us. Why? Gas prices have fallen 18 percent from their peak, the Federal Reserve has stopped raising interest rates and some of the froth is out of the housing market.

Last Friday's jobs report, which showed unemployment at its lowest rate in more than five years, reinforced the perception that the big picture is improving.

Still, the outlook is for a pickup from weak to moderate growth. The consensus forecast of economists surveyed by The Wall Street Journal is for GDP of 2.5 percent through the first half of 2007. The economy is considered healthy at GDP of about 3.5 percent.

Consumer confidence is at its highest level of the year, helped by falling gas prices and a rising stock market. The improved public sentiment matches an improvement in the percentage of Americans who rate the economy positively.

According to the latest ABC/Washington Post poll, 47 percent describe the economy as good or excellent, the highest percentage since July 2001. But more -- 53 percent -- still describe it as not so good or poor.