WASHINGTON, D.C. -- While still negative, Americans’ view of the U.S. economy remains improved in 2024 from last year. Gallup’s Economic Confidence Index is at -20 in March, similar to the -22 found in February but sharply higher than the readings near -50 measured last fall. The index is currently at its highest point since a -12 reading in August 2021.
Economic Confidence Index (ECI)
Gallup’s Economic Confidence Index summarizes Americans’ evaluations of current economic conditions (as excellent, good, only fair or poor) and their outlook for the economy (whether they believe it is getting better or worse).
The index has a theoretical range of +100 (if all Americans rate current conditions as excellent or good and say the economy is getting better) to -100 (if all Americans rate the economy as poor and say it is getting worse). In Gallup’s trend of these measures since 1992, the highest ECI score has been +56, in January 2000, and the lowest has been -72, in October 2008.
The latest results are from a March 1-20, 2024, Gallup poll. This month, President Joe Biden has touted indicators of strong economic performance in his State of the Union address and on the campaign trail. These include record stock values, easing inflation, job creation and low unemployment. Yet, Americans still feel the cumulative effects of rising prices from the past two years.
Current Economic Conditions
Thirty percent of U.S. adults now say economic conditions are excellent or good, while 30% call them only fair and 39% poor. This results in a -9 score on the current conditions component of the index, which is improved from -15 in March and -31 in November. The last time the current conditions score was better than now was in October 2021 (-8).
The percentage of Americans rating economic conditions as excellent or good increased by four percentage points in March, pushing the figure to 30%. This is the highest proportion giving positive evaluations of the economy since June 2021.
Future Economic Outlook
When asked about the economy’s direction, 33% of Americans say conditions are getting better, while 63% say they’re getting worse. Although economic optimism is about the same as last month’s 32%, it has been slowly expanding since October, when 21% said the economy was getting better.
Partisan Perspectives
Gallup trends illustrate the extent to which Americans evaluate the economy through a political lens. As is typically the case, political party groups differ greatly in their evaluations of the economy, with supporters of the president’s party evaluating it much more positively than opponents of the president’s party do.
Democrats’ current economic attitudes result in an Economic Confidence Index score of +35, while independents stand at -28 and Republicans at -62. All three partisan groups, but particularly Democrats, have shown improved confidence since October. Since then, Democrats’ ECI score has increased by 35 points, from 0 to +35, while independents’ score has risen by 15 points (from -43 to -28) and Republicans’ by 10 points (from -72 to -62).
- Republicans have a predominantly negative view of the economy, with 87% believing it is getting worse. Their assessment of current economic conditions is also bleak, with 58% rating them as poor and only 12% considering them excellent or good.
- Independents have a more subdued negative perspective, with 65% saying the economy is getting worse and 28% seeing improvement. Their ratings of current economic conditions are more evenly distributed than Republicans’, with 42% viewing them as poor and 24% as excellent or good.
- Democrats are mostly optimistic about the economy’s direction, with a majority of 64% suggesting the economy is getting better. They are also much more positive in their ratings of current economic conditions, with 55% deeming them excellent or good and only 15% saying current conditions are poor.
Election Implications
The economy is a major issue in presidential elections, particularly when an incumbent is seeking reelection. In the five elections since 1992 involving a sitting president in which Gallup has measured economic confidence, economic confidence has conformed with the election outcome in two elections when confidence was relatively high or low.
- George H.W. Bush lost reelection in 1992 at a time when the ECI was at -37.
- Bill Clinton won a second term in 1996 when the ECI was at +23.
However, when economic attitudes have been mixed, with the index near the zero midpoint of its range, election outcomes have varied.
- In 2004 and 2012, the index was at +1 and -1, respectively -- and both incumbents (George W. Bush and Barack Obama) won.
- On the other hand, in 2020, Donald Trump was defeated at a time when the ECI was at -4, perhaps because the coronavirus pandemic overshadowed the economy.
While the current ECI score is not promising for Biden, Gallup trends show it has the capacity to change in the span of a few months.
- In 2020, confidence plummeted from a 20-year high in February to a deeply negative -32 at the start of the pandemic, before climbing back to neutral territory (-4) by the time of the election.
- In 2012, the index score rose by a total of 13 points between March and October, likely aiding Obama’s reelection.
- In contrast, during the global financial crisis in 2008, the index experienced a decline of 21 points over the same period and remained low for months.
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