Macro Anton
Americans Grow More Optimistic on Stocks and Growth but Fear Inflation and Job Losses
More Americans expect the stock market and economy to improve in the next six months than to worsen, yet they are generally gloomy about unemployment and inflation. The public's outlook on interest rates is more mixed.
These conclusions are based on a question that asked U.S. adults whether each of five economic indices would go up a lot, a little, stay the same, go down a bit, or go down a lot in the following six months. Although some believe they will remain unchanged, more Americans are optimistic than pessimistic about the stock market (50% vs. 25%) and economic growth (49% vs. 36%). The outlook for interest rates is mixed (41% positive vs. 36% negative), with more expecting unemployment and inflation to rise than fall. Sixty-two percent expect increased inflation and fifty percent higher unemployment.
Americans' economic forecast for the next six months is divided. The majority of adults in the United States foresee good momentum in the stock market and general economic growth, and the public is slightly more likely to believe interest rates will fall than climb. These views represent a turnaround from the pessimism witnessed last spring during market turbulence, albeit optimism has not yet recovered to previous highs. At the same time, Americans foresee prolonged economic distress, with a clear majority expecting inflation to rise and half believing unemployment will climb. These forecasts vary substantially by party, with Republicans expecting positive outcomes across the board, while Democrats and independents are more likely to expect worsening situations.
The Gallup poll took taken between January 2 and January 17. It surveyed 1,000 respondents and had a margin of sampling error of +/- 4 percentage points.
Why This News Matters
This picture shows a country that is both cautiously hopeful and still worried. People are beginning to think that the stock market and the economy as a whole could get better. This is a sign that confidence is slowly coming back after last year's chaos. But the good feelings end at the kitchen table. Most Americans still expect prices to go up and jobs to be less secure, which have a direct effect on their daily lives. That gap matters: when people are worried about inflation or their jobs, they tend to spend less. Consumer spending is a big part of the U.S. economy. The difference in expectations between the two parties also suggests that people's feelings about the economy may stay unstable and be influenced as much by politics as by data.
Stock Market and Economic Growth Expectations
According to the Gallup poll, 50 percent of respondents expect the stock market to "go up a lot" or "go up a little" during the next six months, while 25 percent expect it to "go down a little" or "go down a lot." Seventeen percent believed the market would "remain the same," while eight percent were unclear or declined to respond.
When the questions were last asked in April 2025, people's feelings had changed a lot since three months earlier, when President Donald Trump put tariffs on most US trading partners, which made the economy unstable. In April, Americans' optimistic predictions about the stock market fell as Trump's tariff proposals went into effect and the global market became less stable. Public expectations that the stock market will rise at least a little bit fell 32 percentage points, from a record high of 61% to 29%, which is the same as the record low. The number of Americans who think the market will go up in the next few months has gone up by 21 points (50%), while the number who think it will go down has gone down by 33 points to 25%. Another 17% of adults in the U.S. think the market will stay the same. Americans' trust in the stock market has grown, but it hasn't reached the all-time high set in January 2025.
U.S. adults' hopes for economic growth have followed a similar path. A year ago, 53% were optimistic, but that number dropped to 38% in April and has partly returned today. People are more likely to be optimistic about growth (49%) than pessimistic (36%), and they also believe the economy is stable (13%).
Interest Rates, Inflation, and Unemployment
Americans are slightly more likely to forecast that interest rates would fall (41%), rather than rise (36%), with 20% expecting present rates to remain unchanged. This is a reversal of sentiment from April, when significantly more Americans expected interest rates to climb. These estimates are significantly more favorable than the January 2022 reading, when a near-record 78% expected rates to rise.
While Gallup has consistently found that U.S. adults expect inflation to grow, the 2022 reading of 79% was the highest on record. After falling to 67% in early 2023, predictions for increased inflation fell another 15 points to 52% in January 2025 before increasing to 63% in April and remaining at 62%. This still significantly outpaces the 26% who believe it will fall and the 9% who believe it will remain stable.
Americans' unemployment predictions have worsened from January and April of last year. Half of respondents in the United States now expect unemployment to rise, a 12-point increase from January 2025. Another 32% predict a decrease, while 16% predict no change.
Political Divide in Economic Expectations
Americans' estimates for each of the five economic aspects remain ideologically polarized, with Republicans expecting significantly more favorable outcomes than Democrats and independents. Each indicator has a majority-level positive prediction from Republicans (59% for inflation and 82% for economic growth). Democrats are equally likely to predict stock market gains or losses, but majorities or pluralities (varying from 49% for interest rates to 86% for inflation) forecast negative outcomes for the other four indicators. Independents' expectations are more in line with Democrats' than Republicans'.
Republicans' opinions on all five economic issues are comparable to those held a year ago at the start of Trump's second presidential term, but better than in April. Democrats' and independents' projections for the metrics are usually worse than a year ago, but similar to or better than April's results.
Historical Context and Survey Background
Gallup originally asked Americans in October 2001 what they expected to happen with these five aspects of the economy, and it updated them monthly until late 2005. Since then, views have been measured 11 times, although not during the late 2007-early 2009 Great Recession. The most recent data come from a Gallup poll conducted between January 2 and 17, 2017. The previous time the questions were asked, in April 2025, public mood had deteriorated dramatically from three months before, following President Donald Trump's introduction of tariffs on most US trading partners, which increased economic uncertainty. The more cheerful assessments in January 2025 were mostly due to Republicans' excitement about the economy under the new Trump administration.
Trump’s Economic Messaging and Public Opinion
President Trump, who has been worried about the economy lately, talked about how well the U.S. economy has been doing since he took office in an interview that came out on Sunday. Trump told NBC News, “I’d say we’re there now.” "I'm very proud of it."
Later, Trump said that the gross domestic product (GDP) has grown by 5.6 percent since he took office. The Bureau of Economic Analysis says that GDP growth was 4.4 percent in the third quarter of last year. According to a recent NPR/PBS News/Marist poll, Trump's disapproval rating for the economy was at an all-time high for both of his terms. Thirty-six percent of those surveyed said they agreed with how Trump was handling the economy, while 59 percent said they disagreed.
What to Watch Next
The most important question is if life gets easier. If the prices of gas, rent, and groceries go up more slowly, people will notice right away. Job security will also be important. If there are signs of layoffs or a slower hiring process, people may not feel as confident. A lot of families are also waiting to see if the cost of borrowing goes down. This would lower the cost of credit cards, car loans, and mortgages. Also, pay attention to whether people keep spending or cut back. Pullbacks are a sign that people are becoming more concerned about the economy. In the end, the outlook will depend on whether the good news about the market and growth starts to match what people see in their own wallets.
