U.S. Economic Confidence Index Ticks Up to -12

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The FINANCIAL — Gallup’s U.S. Economic Confidence Index averaged -12 for the week ending Sept. 20. This is a slight improvement from the previous week and is up from the recent low point of -17 in late August.

The latest index score falls near the high end of scores since July, which have ranged from -11 to -17, but is a bit worse than ratings from March to June, and even lower than the positive scores from January and February. The brief period of positive scores that began in late December 2014 is the only time scores have been in positive territory since 2008.

Gallup’s Economic Confidence Index is based on the combined responses to two questions — the first asking Americans to rate economic conditions in the U.S. today, and the second asking whether they think economic conditions in the country as a whole are getting better or getting worse. The index has a theoretical maximum of +100, if all Americans were to rate the economy as “excellent” or “good” and “getting better,” and a theoretical minimum of -100, if all Americans were to rate the economy as “poor” and “getting worse.”

The current conditions score — which has seen little movement all summer — was -6 last week, the result of 24% of Americans rating the economy as excellent or good and 30% saying it is poor. The economic outlook score of -18, which gained two points from the previous week, results from 39% saying the economy is getting better and 57% saying it is getting worse. Recent changes in the overall index have been driven mainly by changes in this latter measure, which fell to as low as -25 in late August (35% getting better and 60% getting worse) when the Chinese stock market tumbled.

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Bottom Line

Though Gallup’s Economic Confidence index was up slightly last week to -12, it remains firmly in negative territory, and has not improved after remaining below -10 all summer.

After the announcement last week that the Federal Reserve Board was not raising interest rates, a Fed representative cited a variety of concerns about the global and domestic economy that might have spooked investors. And the stock market continues to perform lower than it did earlier in the year. Nevertheless, consumers’ mood brightened slightly, possibly out of relief that interest rates, which many benefit from, will remain low at least a little longer.


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