U.S. Economic Confidence Remains Lower

U.S. Economic Confidence Remains Lower
Gallup's Economic Confidence Index was -27 for the week ending Aug. 12, similar to the -26 the week prior and little changed from the previous eight weeks, during which it has hovered within a narrow range of -29 to -23.

Economic confidence was at a low point early in the week, at -30 in Aug. 6-9 Gallup Daily tracking, perhaps the result of the July increase in unemployment that the U.S. Bureau of Labor Statistics announced Friday, Aug. 3. However, by the end of the week, confidence recovered to the levels seen over the past eight weeks.

Gallup's Economic Confidence Index consists of two measures -- one assessing current economic conditions and the other assessing the nation's economic outlook. Thirteen percent of Americans say the economy is excellent or good, while 41% consider it poor, resulting in a -28 current conditions rating, unchanged from the previous week -- and little changed since the beginning of July.

The -26 economic outlook rating reflects a slight decline from the previous week, and a considerable decline since early July, with 35% of Americans now saying the economy is getting better and 61% saying it is getting worse.

Bottom Line

Over the past two months, Americans' confidence in the economy has declined, and much of the positive momentum seen earlier in the year has been lost, reflecting the current economic situation. The July jobs report the U.S. government released Aug. 3 showed unemployment had increased, but more jobs were added than expected, perhaps preventing a larger decline in confidence.

Stock prices have also generally remained flat over the past several weeks, with no major gains or losses being sustained, and little has changed in the European economy. If economic indicators remain flat, as they have over the past two months, little change can be expected in the Economic Confidence Index. However, the U.S. presidential election may spur a reaction -- possibly invoking a brief rally in Americans' confidence about the direction of the nation, including the economy.
From: http://www.gallup.com
Updated: August 14, 2012