Americans are Unhappy, Pessimistic

We have a good reason to be unhappy with the state of America. It is bleak out there with an economy sustained by debt, and escalation of violence in the world:

One year before Election Day 2008, most Americans are dismayed by the country's direction, pessimistic about the Iraq war and anxious about the economy. Two of three disapprove of the job President Bush is doing. Nearly a year after Democrats took control of Congress, three of four Americans say it isn't achieving much, either.

In all, 72% of those surveyed in a USA TODAY/Gallup Poll taken Oct. 12-14 say they are dissatisfied with how things are going in the USA while just 26% are satisfied. Not since April have even one-third of Americans been happy with the country's course, the longest national funk in 15 years.

[...]Even in the most optimistic demographic category, however, a majority is dissatisfied with the country's direction — including, for instance, 55% of Republicans. Among Democrats, the conclusion is almost universal: 84% say things are on the wrong track.

Bad news for the Republicans:

Since World War II, no party has managed to hold the White House when the incumbent president had a job-approval rating below 45% one year before the election. Bush's approval rating now: 32%.

Both parties to blame for the do-nothing Congress:

Ethics scandals and opposition to the Iraq war contributed to a Democratic takeover of the House and Senate in last November's elections, but Congress' ratings haven't significantly improved since then. Dissatisfaction is widespread and bipartisan: 76% of those surveyed say Congress has accomplished "not too much" or "nothing at all" this year. Among those, 73% blame both parties equally.

More evidence that the public is pessimistic about the economy:

Consumer confidence in America declined for the third month in a row this month to its lowest level for two years. The Conference Board organisation reported yesterday that its index of consumer sentiment fell more than expected in October.

The news comes on the back of growing concerns about weakening business conditions and the impact that could have on the job market, and a recession in the US housing market.

The severity of that was also confirmed in a separate report that showed home prices posting their biggest drop in 16 years during August. Fears of the effects the continuing credit squeeze is having seem to have intensified, with concerns focusing on the prospects for unemployment. Lynn Franco, director of the Conference Board's consumer research centre, said further weakening in business conditions had tempered consumers' assessment of current conditions and might "very well be a prelude to lacklustre job growth in the months ahead".

There is a good reason for the drop in consumer confidence:

The growth in consumer spending slowed to a crawl in September as shoppers, worried about a deepening housing downturn, stayed away from the malls.

A different gauge of manufacturing activity slipped close to recession levels last month.

The latest economic data is likely signaling that a sharp slowdown is under way over the next two quarters as the housing slump, this summer's severe credit crunch and now rising energy prices take a toll on economic growth, analysts said.

The Commerce Department reported Thursday that consumer spending rose by 0.3 percent in September, the smallest rise in three months and lower than the 0.4 percent increase analysts expected. The 0.4 percent gain in incomes was in line with expectations.

In another report, the Institute for Supply Management, an Arizona-based trade group, said its manufacturing index dipped to 50.9 in October. That was the weakest level since March and the fourth consecutive month that manufacturing has slowed.

The September reading had been 52 and analysts had expected a slightly stronger 51.8 for October. Any reading lower than 50 indicates that the manufacturing portion of the economy is in recession.