Month: September 2013
Gallup’s Economic Confidence Index registers -13, similar to -12 in July
September 3, 2013
WASHINGTON, D.C. — Americans remained more negative than positive last month about economic conditions in the U.S. The Gallup Economic Confidence Index averaged -13 in August, similar to the -12 in July. The current score is down from -7 in May, which was the highest monthly reading since Gallup began tracking economic confidence daily in 2008.
The results for August are based on Gallup Daily tracking interviews, conducted by landline and cellphone, with more than 15,000 Americans.
Gallup’s Economic Confidence Index is based on two components: Americans’ assessments of current economic conditions in the United States and their perceptions of whether the economy is getting better or worse. Americans’ net current conditions score was unchanged last month, at -14, and their net economic outlook score of -11 was down slightly from -9 in July.
The six-point decline in the overall index during the past four months is almost entirely due to the deterioration of Americans’ economic outlook, rather than their evaluation of current economic conditions. Americans’ outlook rating has fallen 10 points since May, while the current conditions rating has slipped three points.
Upper-Income Americans’ Confidence Slips Back Into Negative Territory
Upper-income Americans’ confidence slipped into negative territory after being positive for three consecutive months. This group’s confidence fell five points in August to -3, the largest drop among income groups.
Middle- and lower- income Americans’ confidence is still in negative territory. Americans earning $60,000 to $89,999 annually were briefly more positive than negative about the economy in June, for the first time since Gallup began tracking confidence in 2008, but their confidence is now back in the negative zone.
Economic Confidence Highest in the West, Lowest in the South
Americans living in the West are the most confident in the economy, at -9, while those living in the South are the least confident, at -16. Over the past year, confidence has increased at least 12 points in each region. In the near term, however, confidence has slipped in each region since May’s high point in the overall index.
Economic Confidence Slides in Last Week of August
Although the August monthly average was on par with July’s, confidence has been on a downward trajectory over the past three weeks. Weekly U.S. economic confidence fell four points to -18 in the week ending Sept. 1, the lowest score since late February and early March, when automatic federal budget cuts took effect.
Americans are less positive about the economy than they were earlier this year, with their ratings of the economy’s outlook worsening more than their ratings of current conditions. Upper-income Americans’ confidence has fallen back into negative territory, which could negatively affect future consumer spending. In the short term, confidence fell during the last week in August to its lowest weekly average since March.
There are reasons to believe that Americans’ confidence may not improve in the coming weeks. First, rising mortgage rates and U.S. stock market volatility may continue as the Federal Reserve considers tapering its bond-buying program. Additionally, military action in Syria could weaken Americans’ economic outlook. Finally, the potential for partisan gridlock in Washington over the federal budget and raising the debt ceiling by mid-October could shake consumer confidence.