WASHINGTON, D.C. -- The Gallup Economic Confidence Index averaged -17 last week, significantly improved from the -39 found in mid-October during the federal government shutdown. But the index remains stuck in negative territory at the end of 2013 and is considerably below the peak of -3 measured in early June.
Gallup's Economic Confidence Index has increased by 22 points over the past 2 ½ months, and Americans' confidence has recovered to pre-shutdown levels. Most of the improvement happened in the weeks immediately after the shutdown ended, with the index climbing 10 points in three weeks. The index has risen at a slower pace since then, improving by 12 points over the past eight weeks.
The mostly positive economic news over the past two months may also have played a role in the index's recent steady improvement. The unemployment rate, as reported by the Bureau of Labor Statistics, is at a five-year low; the stock market has set record highs; and the housing market has improved. Additionally, U.S. gross domestic product grew more than many economists expected in the third quarter, and the Federal Reserve in early December felt confident enough about the economy to ease its bond-buying stimulus program.
Americans More Positive About Current Conditions, Economy's Direction
Americans feel more positive about current economic conditions and the economy's future direction -- the two components that make up Gallup's Economic Confidence Index -- than during the shutdown, but less upbeat than in early June.
Last week, Americans were much more likely to say that current economic conditions were "excellent" or "good" (19%) than "poor" (35%). This resulted in a net current conditions score of -16, up from -32 during the shutdown, but a bit below the -9 measured in early June.
Americans are more pessimistic than optimistic about the economy's outlook, with consumers much more likely to say it is getting worse than getting better (56% vs. 38%, respectively). The resulting net economic outlook score of -18 is significantly improved from the -46 recorded during the shutdown, but substantially below the +4 measured in late May and early June.
Despite the sharp drop in consumer confidence during the federal government shutdown, Americans were more confident in the economy this year than they have been in at least six years. Gallup's Economic Confidence Index averaged -16 for all of 2013, up from -21 in 2012 and the best score since Gallup began tracking economic confidence daily in 2008. Still, Americans remain more negative than positive about the economy.
For the index to enter positive territory in 2014, Americans may need to see even more signs of economic recovery, such as the unemployment rate returning to pre-recession levels and larger gains in GDP.
Additionally, consumers also may need to see both political parties working together in Washington. Partisan gridlock and brinkmanship were responsible for the major dips in confidence this year: the fiscal cliff, automatic budget sequestration cuts, and the federal government shutdown. Washington lawmakers took a positive step this month by passing a federal budget agreement. This bipartisanship will likely need to continue for more Americans to feel positive about the economy in 2014.
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 for this Gallup poll are based on telephone interviews conducted Dec. 23-29, 2013, on the Gallup Daily tracking survey, with a random sample of 2,538 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, the margin of sampling error is ±3 percentage points at the 95% confidence level.
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 cellphone 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.