The FINANCIAL — Gallup’s U.S. Economic Confidence Index registered at -11 for the week ending July 12. This matches the previous week’s score, which marked an eight-month low for the index.
The weekly index made significant gains in the latter half of 2014, coincident with the decline in gas prices, and peaked in January at +5. Since then, scores have generally declined, with the latest figures representing the index’s lowest since late October.
Gallup’s Economic Confidence Index is the average of two components: how Americans view the current economy and whether they feel the economy is improving or getting worse. The index has a theoretical maximum of +100, if all Americans rate the economy as excellent or good and improving; and a theoretical minimum of -100, if all Americans rate the economy as poor and getting worse.
For the week ending July 12, 25% of Americans said the economy is “excellent” or “good,” while 31% said it is “poor.” This resulted in a current conditions score of -6, the same as the prior week. The economic outlook score was also unchanged, at -16, the result of 40% of Americans saying the economy is “getting better,” while 56% said it is “getting worse.”
Bottom Line
Much has occurred over the past week to leave Americans’ confidence in the economy depressed. On Wednesday, a technical glitch suspended trading on the New York Stock Exchange for hours, on a day marked by significant stock losses. Meanwhile, abroad, Greece gathered a lot of attention, with the country’s potential exit from the eurozone possibly having economic ramifications in Europe, the U.S. and elsewhere.
These double-pronged threats to the U.S. economy, however, have been neutralized. With the New York Stock Exchange humming as usual and a newly agreed-upon rescue program for the nearly bankrupt Greece, Americans’ confidence could likely improve by next week.
However, confidence had been trending downward even before the stock market glitch and the Greek referendum on austerity, so the recent good news may help confidence only to a limited extent. But with gas prices still relatively low, a rebound in economic confidence is not entirely out of the question.