PRINCETON, NJ -- Gallup's Economic Confidence Index fell to -34 last week, the lowest weekly average since last July. At the same time, Gallup's Job Creation Index remains relatively positive.
Gallup's Economic Confidence Index is based on responses to two questions, one asking about perceptions of current economic conditions and the other about views of the economy's direction. The combination of the answers results in an Economic Confidence Index of -39 for July 3-6, the lowest three-day average since April 2009.
Despite the decline in economic confidence over the last several weeks, Americans' confidence in the economy remains substantially higher than it was during most of 2008 and early 2009 (the Index reached its lowest weekly average of -65 in October 2008).
Americans take into account a number of factors when asked to assess the current status and direction of the U.S. economy, including what they hear, see, and read in the news. In recent weeks, a good deal of economic news has been negative -- in particular, coverage of the substantial drop in the U.S. stock market. Additionally, last week's government jobs and employment data report was met with generally negative interpretation in the news media.
Although downplayed by some economic observers, the overall unemployment rate the government reported last week fell, in line with Gallup's own employment data. Gallup's Job Creation Index has remained more positive in recent weeks than at any point since the fall of 2008.
These findings underscore the need for care in interpreting measures of consumer confidence in the context of the real-world economy. The availability of jobs is a key component of the nation's economy. Even while the average American has become more negative when asked to assess the state of the economy, U.S. workers remain more likely to report that their employers are hiring rather than firing.
Along these lines, it should be noted that Gallup's consumer spending measure is generally holding its own and does not reflect any of the sharp deterioration some might expect to accompany a drop in economic confidence. This further bolsters the view that consumer confidence has its limitations as an indicator of what is happening or will happen in the actual economy.
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.
Results are based on telephone interviews conducted as part of Gallup Daily tracking, including the most recent weekly sample, June 28-July 4, 2010, with a random sample of 3,003 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.
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 daily sample includes a minimum quota of 150 cell phone respondents and 850 landline respondents, with additional minimum quotas among landline respondents for gender within region. 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, cell phone-only status, cell phone-mostly status, and phone lines. Demographic weighting targets are based on the March 2009 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 http://www.gallup.com/.