The FINANCIAL — Americans were slightly more confident in the economy last week, largely related to their brightening expectations for economic growth. Gallup’s U.S. Economic Confidence Index finished at +5 for the week ending Sept. 17, up three points from the previous reading of +2.
Last week marks the first week-over-week gain for Gallup’s U.S. Economic Confidence Index in a month. Notably, the four weeks when confidence slumped or held flat coincided with two major hurricanes battering the second- and third-most populated states in the country (Texas and Florida, respectively), though it is difficult to ascertain whether the hurricanes or the destruction they wrought had a direct effect on economic confidence, according to Gallup.
The more recent of the two storms, Hurricane Irma, rolled through Florida early last week. Because of the storm’s size, experts believed Irma could prove an especially devastating hurricane, speculation that rattled financial markets in the run-up to the storm.
But by the middle of the following week, it appeared that Irma caused relatively little damage, at least compared with initial fears. This helped stock markets rally last week and even end the week on a record high. The stock market rally may have been the primary reason confidence rose last week, just as confidence rose in early August when the Dow Jones hit the then-record of 22,000.
Gallup’s U.S. Economic Confidence Index is the average of two components: how Americans rate current economic conditions and whether they believe 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.
Americans continued to rate current economic conditions positively last week. For the week ending Sept. 17, slightly more than a third (34%) of Americans described the economy as “good” or “excellent,” while 20% instead described the economy as “poor,” leaving the current conditions component at +14. This is similar to the previous week’s score of +13.
Brightening expectations for the economy, meanwhile, were the main reason overall economic confidence rose last week. The economic outlook component was -4 for the week, with 45% of Americans saying the economy was “getting better” and 49% “getting worse.” This was a six-point increase in the outlook component from the previous week’s -10 reading.