WASHINGTON, D.C. -- Gallup’s Economic Confidence Index is -29 in April, nine points lower than March’s -20 reading. This is the first time in five months that confidence has not seen a marginal improvement, and the first decline in economic confidence in the past seven months.
Gallup’s Economic Confidence Index summarizes Americans’ evaluations of current economic conditions (as excellent, good, only fair or poor) and their outlook for the economy (whether they believe it is getting better or worse).
The index has a theoretical range of +100 (if all Americans rate current conditions as excellent or good and say the economy is getting better) to -100 (if all Americans rate the economy as poor and say it is getting worse). In Gallup’s trend of these measures since 1992, the highest ECI score was +56 in January 2000, and the lowest was -72 in October 2008.
The latest results are from an April 1-22, 2024, Gallup poll, conducted as gas prices, and inflation more generally, were rising. Also, during this period, the stock market gave back some of its recent record gains, and high interest rates remained a financial stumbling block for consumers.
Shortly after the poll was completed, the federal government announced that U.S. economic growth had slowed to 1.6% in the first quarter, down from 3.4% at the end of 2023.
Current Economic Conditions
This month, 24% of U.S. adults say economic conditions are “excellent” or “good,” while 32% call them “only fair” and 44% rate them as “poor.”
Excellent or good ratings decreased by six percentage points to 24% in April, while the percentage of Americans rating the economy as poor increased five points to 44%.
The net effect of these changes is that the index’s current conditions component fell to -20 from -9 in March. This drop brings the current conditions score back to where it was in January (-18).
Economic Outlook
When asked about the economy’s direction, 29% of Americans, down from 33% in March, say conditions are getting better, while 67% (up from 63%) say they’re getting worse.
This month’s figures result in a -38 net optimism score for the outlook component of the index, down from -30 in March and the lowest since December 2023 (-40).
Quality Job Outlook
Gallup periodically asks Americans for their assessments of the job market, which is not part of the Economic Confidence Index. Currently, 49% of Americans say it is a good time to find a quality job, and 46% say it is a bad time. The current figure is down six points from the prior measure in January and is the lowest since a 43% reading in April 2021. The record high of 74% was measured in October 2021, as the U.S. economy was rebounding from the COVID-19 pandemic and employers were having difficulty filling jobs.
During the fielding of the current survey, layoffs for white-collar workers -- particularly in the technology industry -- made news, even as the BLS reported that employment rose by 303,000 in March.
Political Perspectives
As is typically the case, political party groups differ greatly in their evaluations of the economy, with supporters of the president’s party assessing it much more positively than opponents of the president’s party do. All party groups show declining confidence in the past month, though the change has been greater among Republicans and independents than Democrats. The three party groups remain more confident now than they were before confidence began picking up in December.
- Democrats have been the most economically optimistic of the three-party groups since Biden took office; their current ECI score dipped to 31 in April from 35 in March.
- Republicans have had a predominantly negative view of the economy during Biden’s presidency, and their assessments of the economy have dipped further this April, from -62 in March to -71, though that is still better than their -77 score in November.
- Independents’ ECI score of -38 reflects a downturn of 10 points since last month but is still above November’s -49.
Election Implications
Today’s -29 ECI score is closer to what it was in mid-1992 (-37), when incumbent president George H.W. Bush lost the election in a campaign dominated largely by economic concerns. When Donald Trump was defeated for a second term in 2020, evaluations of the economy were mostly neutral, at -4 (in October). Economic confidence ratings were neutral in October 2004 (+1) and October 2012 (-1), when incumbents won reelection, and were positive in October 1996 (+23) when Bill Clinton won a second term.
While the current ECI score is not promising for Biden, Gallup trends show it has the capacity to change in the span of a few months.
- In 2020, confidence plummeted from a 20-year high in February to a deeply negative -32 two months later, as the pandemic was starting, before climbing back to neutral territory (-4) by the time of the election.
- In 2012, the index score rose by a total of 13 points between March and October, likely aiding Obama’s reelection.
- In contrast, during the global financial crisis in 2008, the index experienced a decline of 21 points over the same period and remained low for months.
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