US Economic Confidence Index Still Positive

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The FINANCIAL — Americans’ confidence in the U.S. economy last week is about even with what it was the previous week. Gallup’s U.S. Economic Confidence Index averaged +9 for the week ending Feb. 26.

The latest weekly average is two points higher than the prior week’s +7 index reading, though not as high as scores averaging +10 to +14 through most of January, according to Gallup.

President Donald Trump’s inauguration in late January coincided with the index’s reaching highs not seen before in Gallup’s nine years of tracking economic confidence. The index has retreated slightly in February but remains higher than all but a few readings Gallup has tracked since 2008. The Economic Confidence Index has been in positive territory for 15 consecutive weeks.

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 Americans were to say the economy is doing poorly and getting worse.

Americans remain just as upbeat as they were in late January about current economic conditions, but they are now less optimistic about the economy’s future.

The current conditions score for the week ending Feb. 26 was +14, about where it has been since late January. The latest score is based on 35% of Americans rating the economy as “excellent” or “good,” and 21% rating it as “poor.”

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Last week’s economic outlook score was +4, up slightly from the prior week’s +1, though still well below the +13 scores in each of the last two weeks of January. The latest score is based on 48% of Americans saying economic conditions in the country are “getting better” and 44% saying they are “getting worse.”

Bottom Line

Americans are a little less upbeat about the economy than they were in January. Overall, however, Trump’s election has noticeably affected Americans’ confidence, with improvements in both of Gallup’s economic confidence indicators as opposed to a year ago. This shift is buoyed by a massive surge in Republican confidence and a sharp decline in that of Democrats. More than five weeks into Trump’s term and almost four months since his election, Americans have greater faith in the U.S. economy than during most of the Barack Obama years. It is still early in his presidency, however, and this optimism could hold steady or fade as the president’s economic policies are unveiled.

 

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