U.S. Economic Confidence Stable at Low Level

U.S. Economic Confidence Stable at Low Level
Americans continue to have both a negative view of current U.S. economic conditions and a bleak outlook for the U.S. economy's future, resulting in a Gallup Economic Confidence Index reading of -28 for the week of Aug. 13-19 -- basically unchanged from the previous week.

Americans' economic confidence has been low for most of the summer so far, with weekly averages between -23 and -29 since June 11. Prior to that, Americans had been somewhat more optimistic, and the weekly average of -16 in late May represented the highest confidence reading of the year. The -29 reached in January and again in late July represent the low points of the year so far. At the same time, Americans' confidence was significantly lower in the latter part of 2011 than it is now.

Gallup's Economic Confidence Index consists of two measures -- one assessing current economic conditions and the other assessing the nation's economic outlook.

Last week, 13% of Americans rated the economy either excellent or good, while 43% rated it poor -- resulting in a current conditions rating of -30. Sixty percent of Americans said the U.S. economy is getting worse, compared with 35% who said it is getting better, yielding an economic outlook rating of -25.

Americans have been more likely to say the economy is getting worse than to say it is getting better in every weekly average since Gallup began tracking these measures in January 2008.

Bottom Line

With the first of the two back-to-back presidential nominating conventions about to begin next Monday, voters' views of the economy will take on increasing political importance. Republicans will contend that Barack Obama has failed to do enough to remedy the depressed economic conditions he inherited in January 2009, while Democrats will argue that Mitt Romney's election would make economic matters worse rather than better. All of these arguments will be playing to an audience of Americans who agree on one thing: current economic conditions are not good, and the economy's direction is down rather than up.

There are 2 ½ months left before the election on Nov. 6, and Americans' views of the economy can in theory still change during that time. Gas prices have been going up in recent weeks, and it is possible that this has negatively affected Americans' views of the economy. If prices go down again, as they usually do at the end of the summer, Americans could become more positive. On the other hand, the stock market has been generally moving up since June, yet that hasn't seemed to improve Americans' perceptions -- meaning other issues are influencing their views of the economy, including the jobs situation.

Gallup's mid-month assessment of the employment situation suggests it is unlikely that the government on Sept. 7 will report a significant decrease in unemployment for August. Whatever happens going forward, the continuing negative views of the economy Gallup has measured over this summer so far show no signs of any upward shift in Americans' economic optimism.
From: http://www.gallup.com
Updated: August 21, 2012