PRINCETON, NJ -- Americans' economic confidence plunged last week to its lowest weekly level since March 2009. Gallup's Economic Confidence Index fell to -41 in the week ending July 17 -- down from -34 the prior week and -31 during the same week a year ago.
U.S. economic confidence has been running below 2010 levels during most of June and July. But the recent plunge sent this year's economic confidence down even further -- back to the recessionary levels of early 2009.
Gallup's Economic Confidence Index combines two measures: one assessing Americans' views about whether the U.S. economy is "getting better" or "getting worse," and the second involving Americans' ratings of current economic conditions as "excellent," "good," "only fair," or "poor." The "getting better" ratings fell and the "getting worse" ratings rose in the week ending July 17 to levels not seen since March 2009.
Percentage "Getting Better" Remains Low
The percentage of Americans saying the U.S. economy is getting better dropped to 26% last week. This is the lowest level for this measure since March 2009. More than two-thirds of Americans now say the U.S. economy is getting worse -- a two-year high.
Half Rate the Current Economy "Poor"
Fifty percent of Americans now rate current economic conditions "poor" -- the worst reading on the metric since August 2010, and up from twin 45% poor ratings in the prior week and in the same week in 2010.
Last week's plunge in economic confidence comes as Americans' perceptions of the U.S. economy were already near 2011 lows. As a result, confidence is now at the recessionary levels last seen in March 2009.
In part, this low level of economic confidence is likely a result of the economic soft patch of recent months and the lack of job creation associated with it. The political battle over the U.S. debt limit, talk of potential default by the U.S., and the actual default problems in Europe have probably made things worse.
It is possible that the current recession-level economic confidence is largely temporary. If Wall Street can continue to surge and lawmakers in Washington can reach a compromise deal on the debt limit, there could be a strongly positive turnaround in consumer confidence -- similar to the one that followed the budget resolution of late 2010.
However, if such an event is going to take place, it needs to happen soon. The Back to School sales season is close at hand, with the National Retail Federation forecasting flat sales. Even that may be optimistic if confidence continues to tumble. The next few weeks are important not only because the debt ceiling issue needs to be addressed, but also because of the impact that battle is having on consumer confidence as the nation's retailers approach their second-biggest sales season of the year.
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 on a weekly basis in 2011 to the week ending July 17. For the week ending July 17, 2011, on the Gallup Daily tracking survey, interviews were conducted with a random sample of 3,489 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, one can say with 95% confidence that the maximum margin of sampling error is ±3 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 sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents for gender within region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. 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, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2010 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.