U.S. Economic Confidence Inches Up

The Gallup U.S. Economic Confidence Index was -14 last week, compared with -17 the week prior, and still below the five-year high of -8 from early February. Americans’ assessments of current conditions and future outlook each improved.

U.S. economic confidence up

The Economic Confidence Index reached -12 — the highest score since the five-year high — in the last week of March, likely as a reaction to record-high stock prices, a boost in housing prices, and lower gas prices. This score was up from -22 at the end of February and beginning of March as Congress and the president failed to reach an agreement to avoid the sequestration spending cuts.

Gallup’s Economic Confidence Index is based on Americans’ ratings of current economic conditions in the United States as well as their assessments of whether the economy is getting better or worse. Americans’ assessments of both index components inched up last week.

Americans’ perceptions of current economic conditions remain more negative than positive. Their net current conditions ratings increased slightly to -17 from -20 the prior week. The latest reading reflects 18% of Americans saying the economy is excellent or good and 35% saying it is poor.

Americans’ net economic outlook score also slightly improved last week, to -10 from -13 the prior week. Last week, 42% of Americans said the economy is getting better, while 52% said it is getting worse — compared with 41% “getting better” and 54% “getting worse” the prior week.

While the Boston Marathon bombing accelerated a drop in the U.S. stock market and may have resulted in Americans’ feeling more anxious about the future, it did not negatively affect Americans’ assessments of current economic conditions or their economic outlook.

In fact, the Economic Confidence Index slightly improved last week, which may have been related to Americans’ general feelings of patriotism during the hunt for and successful capture of the bombing suspects. Still, the index is unlikely to enter positive territory unless there is consistent improvement in the job market and the unemployment rate.

Source: Gallup Economy

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