- U.S. Economic Confidence Index remains at -10 for second week in a row
- Rise in economic confidence sparked by Democratic National Convention
- Confidence over past two weeks is highest since early March
WASHINGTON, D.C. -- The Gallup U.S. Economic Confidence Index held on to the notable gains recorded in the final week of July, remaining at -10 for the week ending Aug. 7. This marks the best performance over a two-week period since early March, raising the possibility that the slump in economic confidence apparent through much of June and July has at least temporarily abated.
Though the Economic Confidence Index had several relatively strong weekly readings at the beginning of this year, it hit something of a rough patch beginning in April, falling as low as -17. Confidence was especially weak in late June/early July, with the index scoring no better than -15 during the weeks ending June 19-July 24. The cause of this dip in confidence was not immediately apparent. This period corresponded with Britain's unexpected vote to leave the European Union -- an event that many feared would be the source of economic headwinds for the U.S. economy -- but Gallup found no evidence the Brexit vote weakened Americans' confidence.
In the U.S., outside of a temporary drop after the Brexit vote, the stock market was generally higher; gas prices trended downward; and the Bureau of Labor Statistics reported robust job creation in June and July. But overall economic growth remained modest in the second quarter of 2016, and, combined with anticipation of the November election, may have created economic uncertainty for many Americans.
But in the final week of July, Americans' confidence in the economy increased sharply, likely a result of the July 25-28 Democratic National Convention, an event where speakers such as President Barack Obama strongly emphasized the progress the economy has made in the last eight years. This message was most strongly received, not surprisingly, by Americans who identify as Democrats or lean Democratic. Economic confidence among this group rose 12 points to +28 in the final week of July. This heightened confidence held steady for the week ending Aug. 7. Meanwhile, Republicans' low economic confidence has been stable.
By other metrics, last week was a banner one for the U.S. economy. The July jobs report released on Friday outperformed expectations, with the Department of Labor announcing the economy had added 255,000 jobs in July and that private-sector wages grew 2.6% for the one-year period ending in July -- the highest one-year growth in wages since 2009. Partly in reaction to this report, the U.S. stock market had a strong finish on Friday, with the Nasdaq and S&P hitting record highs.
Still, this positive economic news did little to boost Americans' confidence in the economy, at least in the short term. The index for the first four days of the week, before the release of the jobs report, was -10. Confidence in the economy for the three days after the release (including the day of the report) was a similar -9.
Gallup's U.S. Economic Confidence Index is the average of two components: how Americans rate current economic conditions and whether they feel the economy is improving or getting worse. The index has a theoretical maximum of +100 if all Americans say the economy is doing well and improving, and a theoretical minimum of -100 if all Americans say the economy is doing poorly and getting worse.
The current conditions score averaged -2 last week, reflecting 27% of Americans saying current economic conditions are excellent or good and 29% saying they are poor. These figures are virtually unchanged from the prior week.
The economic outlook score averaged -17 last week, also similar to the score from the week ending July 31. This reflects 39% of Americans saying the economy is getting better and 56% saying it is getting worse.
Results for this Gallup poll are based on telephone interviews conducted Aug. 1-7, 2016, on the Gallup U.S. Daily survey, with a random sample of 3,533 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 ±2 percentage points at the 95% confidence level. All reported margins of sampling error include computed design effects for weighting.
Each sample of national adults includes a minimum quota of 60% cellphone respondents and 40% landline respondents, with additional minimum quotas by time zone within region. Landline and cellular telephone numbers are selected using random-digit-dial methods.
Learn more about how the Gallup U.S. Daily works.