U.S. Economic Confidence Best Since May

U.S. Economic Confidence Best Since May
Americans' economic confidence, on a weekly basis, is now at the highest level Gallup has recorded since late May. The Economic Confidence Index score for the week ending Oct. 14 is -17, up from -19 the week prior and -21 the week prior to that. The current data are the first to include a full week of interviewing after the generally positive Oct. 5 jobs report.

U.S. economic confidence has been substantially higher since the first week of September than it was in the weeks prior to that. With the exception of a slight dip during the week ending Sept. 30, Americans' confidence has been holding at the higher end of what Gallup has found in the post-economic-collapse era.

Americans' views about current economic conditions and the economy going forward improved in the past week. The current economic conditions rating of -23 is the best since early June, reflecting 17% of Americans rating current economic conditions as excellent or good and 40% rating current conditions as poor. The economic outlook rating of -10 reflects 43% of Americans saying the economy is getting better and 53% saying it is getting worse.

The improvement in U.S. economic confidence seen since early September has come almost exclusively among Democrats and independents, and both groups became slightly more positive last week. Republicans remain far more negative, and just as negative as they were before economic confidence surged among Americans on average. As such, it is clear that politics are influencing economic confidence at this point -- perhaps more so than actual economic conditions.

Implications

While Americans on average have become more positive about the economy since early September -- as the University of Michigan Consumer Sentiment Index and the Conference Board have also documented -- this is true only among Democrats and independents. The data suggest that the two groups are either seeing more good news in recent economic reports than Republicans are, or finding other reasons in the current political discourse to become more optimistic.

Whatever the reason, it is important to recognize that the current improvement in economic confidence is inextricably related to the current political climate. This will likely continue to be the case until Election Day and into the coming year, as presidential transitions tend to make the winning party more optimistic about national conditions and the losing party more pessimistic. Nonetheless, the measurable improvement in economic confidence in the final weeks leading up to the election -- combined with higher satisfaction with the way things are going in the country -- is good news for those making the case that the economy is improving and that the nation is on the right track. On the flip side, views remain more negative than positive in an absolute sense, bolstering the case of those arguing for a change in leadership.
From: http://www.gallup.com
Updated: October 16, 2012