The FINANCIAL — Americans remain slightly optimistic about the state of the economy, with Gallup’s U.S. Economic Confidence Index averaging +4 for the week ending Dec. 17.
This is statistically similar to the previous reading of +7, though confidence has generally drifted downward since Thanksgiving week, when confidence hit a three-month high of +11.
Gallup’s U.S. Economic Confidence Index is the average of two components: how Americans rate current economic conditions and whether they feel the economy is improving or getting worse. The index has a theoretical maximum of +100 if all Americans were to say the economy is doing well and improving, and a theoretical minimum of -100 if all were to say the economy is doing poorly and getting worse.
Last week, 37% of Americans rated current economic conditions as “excellent” or “good,” while 23% described economic conditions as “poor.” Accordingly, the current conditions component stood at +14 for the week, compared with the previous reading of +17.
Meanwhile, less than half of Americans (45%) said the economy was “getting better,” while 51% said it was “getting worse.” As a result, the economic outlook component was -6 for the week, compared with the last measure of -3.
In light of the measure’s seven-point drop in the past three weeks, Gallup’s U.S. Economic Confidence Index is now slightly below where it was this time last year, providing a rare instance of a time in 2017 when the index is underperforming itself vis-à-vis last year (or any other year).
Notably, though, economic confidence has dropped eight points among Democrats over the three-week period spanning Thanksgiving week to last week — falling from -16 to -24 — while confidence among Republicans has held firm at +50. Over this period, congressional Republicans have advanced their controversial tax reform legislation, which may be signed into law this week. As Gallup has shown, Democrats widely disapprove of this effort, and this could affect their economic perceptions.