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U.S. Economic Confidence Edges Down Last Week

U.S. Economic Confidence Edges Down Last Week
by Andrew Dugan

Story Highlights

  • Decline erases gains index made throughout most of August
  • Economic outlook component falls back into negative territory

WASHINGTON, D.C. -- The recent rally in Americans' economic assessments stalled last week, with Gallup's U.S. Economic Confidence Index declining seven points to average +4 for the week ending Aug. 27. As a result, the index has lost nearly all of the gains it made earlier in the month, when the index climbed from a score of +2 in the final full week of July to as high as +11 for the week of Aug. 14-20.

ECIgraph1

The current reading of +4 brings the index back to the low single-digits range, in which it has primarily resided for much of the past six months.

Last week's dip is tied with the week of March 6-12 as the biggest single-week drop in 2017. The March drop occurred the week after the index hit a nine-year high. Both the March and August rallies came as the Dow Jones industrial average reached new milestones -- 21,000 and 22,000, respectively.

It is difficult to assess whether the drop in confidence last week could be attributable to Hurricane Harvey, which made landfall in Texas Friday and has caused major flooding in the Houston area. Gallup did note a drop in economic confidence in October 2016, when Hurricane Matthew hit the Southeast.

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Economic Outlook Component Dips Back Into Negative Territory

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 perceptions of both the economy's current conditions and its future direction diminished last week, Americans at least remained positive about the current state of the economy. For the week ending Aug. 27, slightly more than a third of U.S. adults (35%) described the economic conditions of the country as "excellent" or "good," compared with the 22% who described conditions as "poor." Overall, the current conditions component finished at +13 for the week, down from a post-recession high of +18 the week before.

However, slightly more Americans last week said the economy was "getting worse" (49%) than said it was "getting better" (44%). As a result, the economic outlook component yielded a negative score for the week (-5), down from +3 one week earlier.

ECIgraph2
Survey Methods

Results for this Gallup poll are based on telephone interviews conducted Aug. 21-27, 2017, on the Gallup U.S. Daily survey, with a random sample of 3,504 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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