By LIZ SIDOTI
AP National Political Writer
WASHINGTON - For all the talk of recovery, Americans are growing increasingly pessimistic about the economy as soaring gas costs strain already-tight budgets. So far, people aren't taking it out on President Barack Obama, a new Associated Press-GfK poll shows.
Even so, the survey highlights a central challenge Obama will face in his campaign for re-election. The president will have to convince a lot of voters who are still feeling financial hardship that things are getting better.
Obama's approval ratings have held steady at around 50 percent over the past month. But the disconnect between negative perceptions of the economy and signs that a rebound are under way could provide an opening for Republicans at the outset of the 2012 campaign.
In the survey, just a sliver of Americans - 15 percent - said they believed the economy had improved over the past month, compared with 30 percent who had thought that in January. Only a third were optimistic of better times ahead for the country, down from about half earlier this year. And 28 percent thought the economy would get worse, the largest of slice of people who have expressed that sentiment since the question was first asked in December 2009.
"It's in a poor state," said Billy Shirley, 74, a Democrat from Commerce, Ga. "Everything's going to the bad. Everyone's spending more on gas, food, everything. The prices on everything are going up, and that's hurting the nation."
Recent economic indicators paint a more positive picture: The unemployment rate, though still high at 8.9 percent, has been declining, and consumer spending and personal income were both up last month. The gross domestic product was growing at an annual rate of 3.1 percent as last year ended.
Americans are acutely focused on their financial well-being, even as turmoil in the Middle East commands international attention. And the foreign unrest is directly affecting them by boosting oil prices. More Americans - 77 percent, up from 54 percent last fall - now say gas prices are highly important to them.
Obama's job-performance ratings haven't suffered as people's attitudes about the economy have shifted over the past month.
Half still approve of how he's doing his job, and half say he deserves to be re-elected. His rating on handling the economy was unchanged: 47 percent approved. In fact, twice as many people said Obama "understands the important issues the country will need to focus on during the next two years" as said that about Republicans in Congress.
That's not to say that Obama is escaping responsibility for the economic situation.
Annale Iltis, 26, of Sarasota, Fla., faults big business, the federal government and, to a lesser extent, the president.
"I do a bit," she said, "but at the same time he has good ideas. He just doesn't have the backers in the House and the Senate to get them done." The self-described independent voter, who supported Obama in 2008 and says she would do so next year, is concerned that deep budget cuts that Congress is considering will hurt the fragile economic recovery.
"It seems stable now but I fear it's going to go downhill quickly," she said.
Henry Kugeler, 49, of Chicago, likened the situation to the fable about the crawling tortoise that wins the race against the speedy hare, saying: "Right now, the country is the tortoise. I don't think the economy is getting worse. The recovery that's happening is real, but it's incredibly slow."
The Democrat doesn't blame Obama or other politicians, saying: "They haven't helped but I don't know that they've hurt."
Obama inherited an economy in recession. Republicans angling for the chance to challenge him next fall have been blaming him for the slow recovery and arguing they could do better. Presidential advisers are hopeful that the positive economic trends continue, giving Obama an opportunity to make the case for keeping him in office rather than risk an economic backslide.
As the slow-to-start GOP nomination fight starts in earnest this spring, the poll shows that candidates clearly have work to do.
More than or nearly half of Republicans surveyed say they don't know enough about the following potential contenders to even express an opinion about them: Mississippi Gov. Haley Barbour, Indiana Gov. Mitch Daniels, former Utah Gov. Jon Huntsman, former Minnesota Gov. Tim Pawlenty, former Pennsylvania Sen. Rick Santorum and Minnesota Rep. Michele Bachmann.
Roughly two-thirds of Republicans expressed favorable views of former Arkansas Gov. Mike Huckabee and former Alaska Gov. Sarah Palin, while former House Speaker Newt Gingrich and former Massachusetts Gov. Mitt Romney got slightly lower marks.
Even though many of the candidates aren't well-known, about half of Republicans say they are satisfied with their choices.
The poll comes just as Republicans and Democrats on Capitol Hill wrestle over the federal budget, and there could be a partial government shutdown without further action by Congress.
The Republican-controlled House has approved some $60 billion in spending cuts. The Democratic Senate is looking at $33 billion. Without agreement, some Republicans say they won't approve funding to keep the government operating.
The issue of federal spending isn't just something lawmakers talk about. It's clearly weighing on the public.
Roughly half in the survey said they expected enormous federal budget deficits to cause a major economic crisis for the country for the next decade, and most said they worry that mounting federal debt will hamper the financial future of their children and grandchildren.
In the shorter term, people in the poll view everyone negatively when it comes to handling the deficit, but lawmakers get worse marks than the president. Only about a third of those surveyed approve of how Republicans and Democrats are dealing with the issue, while 41 percent approve of Obama on the matter.
People also are evenly divided on which party would best handle the deficit.
The Associated Press-GfK Poll was conducted March 24-28 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cell phone interviews with 1,001 adults nationwide and had a margin of sampling error of plus or minus 4.2 percentage points.
Associated Press Polling Director Trevor Tompson, Deputy Polling Director Jennifer Agiesta and News Survey Specialist Dennis Junius contributed to this report.