Latest skid in confidence reverses slight improvement seen earlier in September
PRINCETON, NJ -- Americans' confidence in the economy faltered last week -- reversing the slight improvement seen in early September -- and is now nearly as negative as it was throughout August after a steep decline in July. Gallup's Economic Confidence Index for the week ending Sept. 25 is -52, compared with -54 in late August and -34 at the start of July. Confidence continues to run well below year-ago levels.
Gallup's economic trends are based on nightly interviews with approximately 500 national adults as part of Gallup Daily tracking, for a total of approximately 3,500 interviews each week. Gallup measures economic confidence as an index, using Americans' ratings of current economic conditions on a four-point scale (as excellent, good, only fair, or poor) and their perceptions of the economy's direction as either getting better or getting worse. The index has a theoretical maximum of +100 and a theoretical minimum of -100.
Economic Confidence at Least Partially Tied to Dow Jones
Gallup trends show economic confidence rising and declining each week this month in general accordance with weekly shifts in the Dow Jones industrial average. The Dow Jones daily closing values averaged 183 points lower last week than the week prior. Similarly, economic confidence for the week was down five points to -52.
This pattern is apparent through much of 2011. Gallup trends show that Americans' economic confidence tumbled in July, first after news about Europe's mounting debt crisis and later as congressional debate over the federal debt ceiling intensified. Part of that decline may have resulted more specifically from drops in the U.S. stock market in mid- and late July stemming from Wall Street jitters over both issues.
For example, in the last week of July, the Dow Jones industrial average closed down on five consecutive days, with the average closing values for these (12,356) down 234 points from the prior week's average closing values (12,590). At the same time, Gallup's Economic Confidence Index averaged eight points lower than the prior week, -51 vs. -43.
Americans' confidence in the economy held fairly steady over the first two weeks of August. This happened despite the Dow Jones' losing nearly 900 points in the period after Standard and Poor's downgraded the U.S. credit rating and a weak August jobs report. The drop in the Dow also reflected market fears of a double-dip recession. While it is unclear why confidence held steady during this time, it is possible that Americans' relief over congressional passage of a temporary budget deal may have offset their concerns about the stock market and broader economic problems. Alternatively, confidence may merely have been so low in late July that it could not easily descend much further.
The stock market and economic confidence partly rebounded in late August/early September, but since then, both have been unsteady.
Americans' confidence in the economy continues to be extremely fragile after the economic and political drama of the past two months. Thus far in September, confidence has improved ever so slightly, with weeks of improvement followed by weeks of nearly comparable decline.
The September consumer index reports of the Conference Board and Reuters/University of Michigan are due out this week. Because both surveys are weighted toward interviews conducted in the first half of the month, it is likely they will show slight improvements compared with August; however, given the latest downturn in confidence as seen in Gallup's weekly measures, those reports could be a bit rosier than is warranted.
Gallup.com reports results from these indexes in daily, weekly, and monthly averages and in Gallup.com stories. Complete trend data are always available to view and export in the following charts:
Read more about Gallup's economic measures.
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Results are based on telephone interviews conducted as part of Gallup Daily tracking Sept. 19-25, 2011, with a random sample of 3,501 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±2 percentage points.
Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2010 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
For more details on Gallup's polling methodology, visit www.gallup.com.