Americans' Confidence in the Economy Recedes Post Election

Americans' Confidence in the Economy Recedes Post Election
Gallup's U.S. Economic Confidence Index dropped to -15 last week, from -11 the week prior. But, this is still one of the best readings of 2012.

The pullback in economic confidence resulted from a drop in both components of the index -- assessments of current economic conditions and of the nation's economic outlook. The -7 economic outlook rating is down from -2 the week before, with 44% of Americans saying the economy is getting better and 51% saying it is getting worse.

Sixteen percent of Americans say the economy is excellent or good, while 39% say it is poor, resulting in a -23 current conditions rating, down from -19 the week prior.

Economic Confidence Down Across Party Lines

Economic confidence declined among all political groups last week. Despite this uniform change, Democrats and Republicans remain sharply divided on their opinions of the economy, with Economic Confidence Index scores of 31 and -62, respectively.

Independents continue to be middle of the road, at -20. The gap between Democrats' and Republicans' evaluations of the economy grew as the Nov. 6 election approached, and at 93, the gap remains among the largest between the two parties Gallup has found, second only to the previous two weeks, which were at 94 and 95.

Bottom Line

Concerns about the looming "fiscal cliff" and a slumping stock market may be largely responsible for Americans' retreating economic confidence. If Congress and the president fail to reach a budget deal, substantial tax increases and spending cuts will automatically take effect in January, an outcome that economists warn could push the U.S. back into a recession.

Last week also saw an increase in unemployment claims, much of which was the result of jobs lost after Superstorm Sandy hit the east coast. Gallup also reported an increase in unemployment, echoing the government reports of fewer Americans finding work.

Although economic confidence in the U.S. in recent weeks has been at its highest since 2008, future improvement, including getting into positive territory anytime soon, likely hinges on the ability of Congress and the president to reach an agreement and avoid the fiscal cliff.

 

From: http://www.gallup.com
Updated: November 20, 2012