- Gallup Economic Confidence Index improves from -43 to -32
- Best index reading since January 2022
- Republicans’, independents’ ratings of economy improve the most
WASHINGTON, D.C. -- Americans’ assessments of the U.S. economy have improved significantly in the past month, though they remain negative overall. Gallup’s Economic Confidence Index increased from -43 in May to -32 in June and is the highest it has been since January 2022 (-26).
Gallup’s Economic Confidence Index summarizes Americans’ evaluations of current economic conditions and their assessment of whether the economy is getting better or worse. It has a theoretical range of -100 to +100. The former score would indicate all Americans rate current conditions as poor and say the economy is getting worse, while the latter would indicate all Americans rate current conditions as excellent or good and say the economy is getting better.
The index has mostly been in negative territory over the past three years. It dropped to -58, the worst since the Great Recession, amid soaring inflation and gas prices in June 2022.
The new June 1-22 poll began just after President Joe Biden and House Speaker Kevin McCarthy reached agreement on a bipartisan bill to raise the federal debt ceiling. There was also some positive economic news in June as the job market remained strong and inflation continued to ease, leading the Federal Reserve to pause its series of interest rate hikes. In addition, the stock market has shown steady gains in recent months, with the S&P 500 achieving bull market status in early June.
Americans More Optimistic About Economic Conditions and Economy’s Direction
Americans’ scores on both components of the Economic Confidence Index -- current conditions and the economy’s trajectory -- improved in June.
Currently, 19% of Americans rate economic conditions as excellent or good and 44% as poor (with 37% describing them as “only fair”), for a -25 score on the current conditions component of the index. That compares with a -30 score for current conditions in May and is the best measured since a -22 reading in April 2022.
The economic outlook component showed more substantial improvement. Now, 27% of Americans say the economy is getting better versus 66% who say it is getting worse, for a -39 outlook score. In May, the outlook component score was -56, based on 20% saying the economy was getting better and 76% worse.
All Party Groups Are More Positive About the Economy
Republicans and independents both registered double-digit increases in their Economic Confidence Index scores in June, with Republicans’ score increasing by 14 points and independents’ by 13. Democrats, who are much more positive about the economy overall, had a smaller but still notable seven-point improvement.
Republicans remain highly pessimistic about the economy, with a -65 index score, while independents are at -35 and Democrats are in positive territory at +5.
Democrats’ evaluations of current economic conditions are unchanged from May, but Democrats are now more likely to say the economy is getting better. They divide evenly as to whether the economy is getting better (46%) or worse (47%), but they are more likely to rate current conditions positively (34% excellent or good) than negatively (23% poor).
Independents are more positive about both dimensions than they were in May, but more so about the direction of the economy. Even so, more than twice as many independents say the economy is getting worse (67%) than say it is getting better (26%).
Republicans show similar increases on both measures but are decidedly negative on each -- the majority evaluate the economy as in poor shape, and more than four in five say it is getting worse.
U.S. adults continue to evaluate the U.S. economy negatively overall, but they have seen enough signs of strength to increase Gallup’s Economic Confidence Index by 11 points this month. The index score is now the best it has been since January 2022. However, it is still well below where it was in the early stages of Biden’s presidency when COVID-19 infections were dropping sharply and the economy was improving rapidly before inflation surged.
While the economy has many strong aspects today, many economists still worry that continued high inflation and the interest rate hikes designed to slow it could lead to an economic recession.
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