Monthly U.S. Economic Confidence Up Sharply in September

Monthly U.S. Economic Confidence Up Sharply in September
The Gallup Economic Confidence Index averaged -19 in September, up from -27 in August and nearly matching the -17 seen in May, the highest monthly reading since the start of Gallup Daily tracking in 2008.

The monthly reading is based on interviews with more than 14,000 national adults in Gallup Daily tracking from Sept. 1-30, and thus represents a true average of consumer attitudes over the entire month.
The eight-percentage-point overall improvement in September is almost entirely owing to a jump in Americans' economic outlook, rather than their evaluation of current economic conditions. Of the two index components, the outlook rating rose 13 points in September, to -13, while the current conditions rating rose three points, to -26.

Democrats Drive Improvements in September

As Gallup reported in weekly updates of economic confidence in September -- on Sept. 11, Sept. 18, and Sept. 25 -- confidence has surged among Democrats, but has also improved somewhat among independents. For the month, Democrats' confidence was up 14 points, to +23, and independents' was up nine points, to -24. At the same time, Republicans' confidence was down slightly, at -59.

In line with the overall results, the improvement in Democrats' and independents' economic confidence occurred mainly in their outlook for the economy, rather than in their ratings of current conditions.

Improved Confidence Evident Each Week of September

Americans' economic confidence moved sharply higher starting on Sept. 4, the first night of the Democratic National Convention, so that for the week ending Sept. 9 it was up 11 points to -18. It remained at that level for the next two weeks, through Sept. 23. And while it dipped slightly to -21 in the week ending Sept. 30, it remained well above the -26 to -29 range seen in August's weekly averages.

Bottom Line

Democrats and, to a lesser degree, independents became significantly more optimistic about the economy's direction in September, pushing the overall Gallup Economic Confidence Index up eight points to -19, nearly the highest it's been in more than four years. While the catalyst for this optimism appears to have been the Democratic National Convention at the start of September, the effect persisted, with only a slight easing in the fourth week, ending Sept. 30.

Overall, it is clear that politics is playing an inordinately large role in economic perceptions. As such, it will be important to take that into account when examining consumer attitudes through the final month of the U.S. presidential campaign and at the start of the next administration, particularly if there is a change in power.
From: http://www.gallup.com
Updated: October 2, 2012