PRINCETON, NJ -- U.S. economic confidence declined to -23 in the week ending April 8, down from -20 the prior week, and from -17 the week ending March 25. Confidence is now approaching the relatively low levels seen in January and February, but remains better than the -33 of a year ago.
Americans' economic confidence has been threatening to break out of its four years in the doldrums in early 2012, and actually achieved it on a weekly basis by one percentage point. Economic confidence reached a new weekly high of -17 in the week ending March 25 after matching the previous weekly high of -18 during the week ending March 11.
Last year, there was a similar if briefer period of optimism, as economic confidence was also at -18 during the week ending Feb. 13, 2011. Shortly after that time, the earthquake and tsunami in Japan, followed by the summer battle over the debt ceiling, seemed to hurt confidence and economic growth. Last year's pattern may be starting to repeat itself, although for different reasons.
The Gallup Economic Confidence Index includes two components: Americans' ratings of current economic conditions and their perceptions of whether the economy is getting better or getting worse. Declines of the past two weeks have been driven mostly by deterioration in consumers' perceptions of the economy's future direction.
The percentage of Americans saying the economy is getting better decreased to 39% from 44% two weeks before, while the percentage saying it is getting worse increased to 56% from 52%. Consumers' ratings of the current economy have been essentially unchanged over the past two weeks, with 42% "poor" ratings last week, compared with 41% in the week ending March 25.
Over the past couple of weeks, Americans' perceptions of the U.S. economy seem to have changed. Not only did confidence fail to build on its recent weekly record high from two weeks ago, but it worsened again last week despite the Easter holiday and the higher spending preceding it.
In part, confidence could be declining because the average consumer may be giving greater importance to increasing gas prices. Another factor may be the doubts various economic observers, including Federal Reserve Chairman Ben Bernanke, are raising about the sustainability of the recent improvements in the unemployment situation barring stronger economic growth.
A third factor in the recent decline in economic confidence might involve Friday's March unemployment report -- although only two days of Gallup polling for the most recent week took place after the report. The government reported a decline to 8.2% in the seasonally adjusted unemployment rate -- essentially matching the 8.1% reported by Gallup Daily tracking of unemployment. However, the creation in March of only 120,000 new U.S. jobs when 200,000 or more were expected put a negative interpretation on the unemployment report. Most importantly, this report seemed to confirm the fears of those worried about the sustainability of job growth.
The rapidly improving unemployment situation, as reflected in the government's February and earlier unemployment reports, seems to have more than offset the drag of increasing gas prices at the pump. That may no longer be the case going forward. That is, it seems the U.S. economy is going to have to show some added strength in the near term if it is to avoid last year's scenario of a strong surge in confidence at the start of the year followed by a spring falloff.
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Results for the week ending April 8, 2012 are based on 2,908 telephone interviews conducted as part of Gallup Daily tracking with 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 this weekly 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 by 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 2011 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.