U.S. Economic Confidence Surged 11 Points Last Week

U.S. Economic Confidence Surged 11 Points Last Week
The U.S. Gallup Economic Confidence Index surged to -18 for the week ending Sept. 9, up 11 points from -29 the prior week. This puts the index near the high point for the year after 2 ½ months when, weighed down by continued high unemployment, the index had languished well below -20.

At -18, the index is also on par with the highest levels seen since the start of Gallup Daily tracking in January 2008, although this has proved a difficult barrier for the index to break. The index has reached -16 or -17 just a handful of times in weekly averages, only to quickly recede.

Last week's 11-point jump is also the biggest one-week improvement in the Gallup Economic Confidence Index since its inception, although it roughly matches the 10-point gain that occurred the week after the killing of Osama bin Laden in May 2011.

The biggest weekly change of any kind in the index was the 15-point decline that occurred at the start of the U.S. financial crisis in September 2008.

Democratic National Convention Moves Consumers

It appears that the spark for the dramatic rise in Americans' economic confidence last week was the Democratic National Convention. A review of Gallup's nightly tracking results shows that the index was consistently near or below -25 each night in late August and early September, but then sharply improved on Sept. 4, the first night of the convention, to -18.

Confidence then held at or near -18 through Sunday, despite the U.S. Bureau of Labor Statistics' mixed August unemployment report Friday morning showing continued weak jobs growth.

More specifically, the convention appears to have given Democrats and, to a lesser degree, independents, fresh optimism about the economy. Democrats' confidence for the week spanning the convention averaged +24, up 17 points from +7 the prior week. Confidence was up 13 points among independents, but was virtually unchanged among Republicans.

There was no comparable shift in Americans' views of the economy, either overall or by party, during the prior week spanning the Republican National Convention.

Bottom Line

While television ratings for most nights of this year's presidential conventions were down from 2008, enough coverage of the Democrats' convention may have filtered through to the party faithful and independents -- particularly online and through social media -- to generate improved confidence in the economy under President Obama's stewardship. This could reflect renewed confidence in the economy per se, or heightened enthusiasm for the Democratic Party generally.

It remains to be seen whether the gains made last week will carry into the fall, or whether -18 will again prove an impenetrable boundary for the Gallup Economic Confidence Index to surpass, at least by much, as long as the nation's employment picture remains weak.
From:http://www.gallup.com
Updated: September 11, 2012