WASHINGTON, D.C. - Americans' confidence in the economy is heading further into negative territory after almost reaching the net positive range in late May and early June. Gallup's Economic Confidence Index, at -14 last week, remains down from the all-time weekly high of -3 measured in the week ending June 2, and has been at or below -10 since the week ending July 14.
Americans' lower level of confidence since early June could be related to a wide variety of factors, including rising mortgage rates, mixed Bureau of Labor Statistics employment news, and more volatile U.S. stock prices in reaction to the Federal Reserve's decision to taper its bond-buying program.
Last week's score is slightly below the -12 average for 2013 to date, which is on pace to surpass the -21 average for all of 2012.
Upcoming negotiations in Washington over raising the federal debt limit, however, could significantly dampen Americans' confidence in the economy. In the summer of 2011, consumers' confidence in the economy plummeted to levels not seen since the 2008-2009 economic recession as Congress finally reached an agreement to raise the U.S. debt ceiling and Standard & Poor's subsequently downgraded the U.S. credit rating.
Americans' confidence in the economy also fell during the fiscal cliff debate at the end of 2012 and the budget sequestration debate in early March. These developments show that Americans' confidence in the economy is sensitive to significant political events. Thus, the possibility of intense partisan gridlock during negotiations over the federal debt ceiling could significantly affect the nation's economic recovery.
Gallup's Economic Confidence Index is based on two questions that ask Americans to rate economic conditions in the country today, and to give their views on whether the economy is getting better or worse.
For the most recent week, 42% of Americans said the economy is getting better, while 54% said it is getting worse. That results in a -12 score for Americans' economic outlook, which is below the average of -8 so far this year. Americans' net economic outlook score was positive during two weeks in May and June.
Last week, 20% of Americans rated current economic conditions as "excellent" or "good," while 35% rated them as "poor." That results in a -15 net current conditions score, which matches the average so far this year.
Gallup's Economic Confidence Index has declined since nearly entering positive territory in late May and early June, and Americans remain more negative than positive about U.S. economic conditions.
The upcoming debates on Capitol Hill over the federal budget and raising the debt limit -- with a government shutdown looming if lawmakers do not reach agreement -- could negatively affect the higher levels of economic confidence among Americans compared with the past five years. While the economy is generally stronger than it was during the federal debt ceiling debate in 2011 that nearly resulted in a government shutdown, partisan gridlock on this issue could be detrimental to confidence on Wall Street and Main Street.
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.
View our economic release schedule.
Results for this Gallup poll are based on telephone interviews conducted Aug. 19-25, 2013, on the Gallup Daily tracking survey, with a random sample of 3,552 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 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 sample of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by region. Landline and cell telephone 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 to correct for unequal selection probability, nonresponse, and double coverage of landline and cell users in the two sampling frames. They are also weighted to match the national demographics of gender, age, race, Hispanic ethnicity, education, region, population density, and phone status (cellphone only/landline only/both, and cellphone mostly). Demographic weighting targets are based on the March 2012 Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the July-December 2011 National Health Interview Survey. Population density targets are based on the 2010 census. All reported margins of sampling error include the computed design effects for weighting.
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.