PRINCETON, NJ -- Americans became more dispirited about the state of the U.S. economy last week, with Gallup's Economic Confidence Index dropping to -30 for the seven days ending Dec. 5, the lowest weekly reading since early October.
The current weekly average marks a downturn from the more positive -22 average for the week of Thanksgiving, suggesting that hopes of a sustained improvement in Americans' economic confidence are not being realized, at least in the short term. Still, economic confidence is not as low as it has been during other times of the year, including -37 in late August and -36 in July.
The Economic Confidence Index consists of two ratings -- consumers' perceptions of current economic conditions and consumers' assessments of whether the economy is getting better or worse.
At this point, 11% of Americans rate economic conditions as excellent or good, while 46% rate them as poor. The percentage of Americans who rate the economy as "poor" is the highest since early October, and up six percentage points from last week.
Americans continue to be pessimistic about the economy's direction, with 59% saying the economy is "getting worse," up slightly from last week, but little different from previous readings in November. Thirty-four percent believe the U.S. economy is getting better.
Two economic issues dominated the news last week -- the continuing battle over the fate of the Bush-era tax cuts and Friday's government report on unemployment.
Gallup data show that 8 out of 10 Americans want the Bush-era tax cuts extended for either all taxpayers or those below a specific income threshold. Last week's drop in confidence may have thus been a reaction to expectations that the government might not end up agreeing to extend the tax cuts. If uncertainty over tax cuts was a major cause of last week's downturn in economic confidence, the negativity could soon turn around: It appears that Congress and the White House will agree on an extension of the Bush tax cuts sometime before the end of the current lame-duck Congress.
Last Friday's U.S. unemployment report from the government was widely interpreted as negative, although Gallup's ongoing measurement of unemployment suggests a more positive picture. At any rate, Friday's report was probably not a major factor in the week's downturn in economic confidence, given that it came late in the week, and that Americans' pessimism about the economy was already evident in Gallup Daily tracking prior to that.
Economic confidence is now about where it was at this time last year (-28), but still much better than two years ago. As a point of comparison, Gallup's Economic Confidence Index was at -59 in early December 2008, at the height of the mortgage crisis and spiraling global financial collapse.
Gallup's next update on economic confidence, to be published on Tuesday, Dec. 14, will help determine whether this week's lower ratings are the beginning of a period of lower economic optimism or a more short-lived reaction to current economic news.
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:
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Results are based on telephone interviews conducted as part of Gallup Daily tracking Nov. 29-Dec. 5, 2010, with a random sample of 2,981 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 www.gallup.com.