The FINANCIAL — Americans’ level of confidence in the economy last week continued to be the highest Gallup has measured since mid-March.
Gallup’s U.S. Economic Confidence Index averaged +8 for the week ending Aug. 13. This score is similar to the score the week before, when the index climbed five points to hit +7, ending a three-month period in which confidence remained within a tight window of zero to +5.
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.
While confidence in the economy has remained positive throughout 2017 — a sharp contrast to the mostly negative scores Gallup recorded from 2008 to 2016 — it weakened in late March. Americans’ worsening expectations for the economy, especially among Democrats, were behind the relative decline.
But in early August, prominent indicators pointed to a strengthening economy. The surging Dow Jones industrial average surpassed the 22,000 milestone for the first time on Aug. 2 and has remained near this level since. Additionally, an Aug. 4 Labor Department report found that the U.S. economy added 209,000 jobs in July, with the unemployment rate consequently falling to 4.3%.
Current Conditions Component Nears All-Time High
Last week, the current conditions component climbed one point to +16. This is just shy of the record-high +17 reached in mid-March 2017 after overall confidence soared to a nine-year high as the Dow Jones industrial average eclipsed the 21,000 mark. Five months later, the latest reading of the current conditions component reflects the 36% of Americans who say the economy is “excellent” or “good” compared with the 20% who say it is “poor.”
The economic outlook component, meanwhile, registered -1 last week, with 46% of Americans saying the economy is “getting better” and 47% saying it is “getting worse.” While still negative, this component has improved slightly since registering a yearly low of -8 for the week of June 26-July 2.