POLL: Economic Expectations Now Their Lowest in 27 Years

July 15, 2008— -- The day George W. Bush called a news conference intended to shore up economic confidence, a new ABC News survey finds pessimism about the economy's direction its highest in 27 years of polls.

Seventy-eight percent of Americans now say the economy's getting worse, the most in polls that first asked the question in March 1981. It was 77 percent in May, tying a record that had stood since fall 1990, in the midst of the 1990-91 recession.

Even as Bush spoke Tuesday morning, calling the economy basically sound, Fed Chairman Ben Bernanke gave a gloomier report to Congress, warning of inflation and a continued slowdown. Their appearances followed federal moves to rescue mortgage giants Fannie Mae and Freddie Mac and to seize the California lender IndyMac.

While those developments are new, sour consumer views aren't. Expectations have been bleak since late last year, with more than six in 10 Americans saying the economy's getting worse for nine months straight, an unprecedented streak of pessimism. Negative expectations are almost double their average, 40 percent, in polls since 1981.

On the flipside, optimism's been in a similar rut; for five months straight just 4 percent or fewer have said the economy's getting better.

The mortgage and banking sectors' troubles pile on top of the main irritant to consumer views, $4-plus gasoline. A separate ABC News/Washington Post poll this week found that just two in 10 Americans rate themselves as "very secure" financially, two-thirds report at least some stress as a result of their financial situation and for one in four it's "major" stress.

INDEX – Separately, ABC's Consumer Comfort Index, based on views of current economic conditions (rather than expectations), stands at -41 on its scale of +100 to -100, up from its record low, -51, in late May, but stuck at or below -40 for 13 consecutive weeks. That compares to a 22-year average for the index of -10.

The index is based on current ratings of the economy, buying climate and personal finances. Only 14 percent rate the national economy positively, and it's been at or below 15 percent for 14 weeks straight, the longest period since a year-long stretch following the 1990-91 recession.