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U.S. Economic Confidence Continues to Rise in August

U.S. Economic Confidence Continues to Rise in August
by Andrew Dugan

Story Highlights

  • Weekly index climbs three points to +11; up nine points in three weeks
  • Current conditions component hits new nine-year high, at +18
  • Economic outlook component positive for first time since April

WASHINGTON, D.C. -- Americans' confidence in the economy continues to strengthen in August. Last week, Gallup's U.S. Economic Confidence Index averaged +11, up three points from the previous week. The index has increased by nine points over the past three weeks and is now at its highest level since mid-March.

Graph 1

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' economic perceptions have been mostly positive throughout 2017. This is a fundamental change from 2008 through most of 2016, when pessimism prevailed.

Still, the Economic Confidence Index has had some ups and downs in 2017. After hitting a nine-year high of +16 in early March, the index declined throughout the spring. For much of the summer, confidence hovered near zero, the neutral midpoint for the index -- indicating that Americans had highly mixed views about the state of the economy.

In August, confidence has rallied. Gallup's U.S. Economic Confidence Index jumped five points during the week of July 31-Aug. 6, coinciding with the Dow Jones industrial average finishing above 22,000 for the first time. Subsequent economic news in August may have solidified or expanded economic confidence, including last week's report that U.S. retail sales rose 0.6% in July, the best one-month gain for this indicator in seven months. The U.S. Bureau of Labor Statistics also announced that weekly jobless claims fell to a six-month low for the week ending Aug. 12.

Current Conditions Component Registers Nine-Year High

Amid the bundle of good economic news, Americans' perceptions about the current state of the economy reached a post-recession high last week. For the week ending Aug. 20, 37% of Americans described economic conditions as "excellent" or "good," while 19% rated conditions as "poor." As a result, the current conditions component stood at +18, up slightly from +16 the week before.

Americans' economic expectations turned positive last week for the first time since April, with the outlook component rising four points to +3. This reflects 48% of Americans saying the economy is "getting better" and 45% saying it is "getting worse."

Graph 2

Bottom Line

After stagnating for much of the summer, Americans' confidence in the economy has been rising throughout August, including a three-point increase last week. Confidence is now the strongest it has been since early March and, more generally, is at one of its highest points in the past nine years.

Overall satisfaction with the state of the economy, meanwhile, may be one reason that Americans' perceptions of several major business and industry sectors have risen to 14-year highs.

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Survey Methods

Results for this Gallup poll are based on telephone interviews conducted Aug. 14-20, 2017, on the Gallup U.S. Daily survey, with a random sample of 3,509 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, the margin of sampling error is ±2 percentage points at the 95% confidence level. All reported margins of sampling error include computed design effects for weighting.

Each sample of national adults includes a minimum quota of 70% cellphone respondents and 30% landline respondents, with additional minimum quotas by time zone within region. Landline and cellular telephone numbers are selected using random-digit-dial methods.

Learn more about how the Gallup U.S. Daily works.

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