Story Highlights
- ECI up from -38 in June to -31 in July
- Most rate economy as fair (32%) or poor (44%); 67% say it is getting worse
- Government remains most-cited issue as nation’s top problem
WASHINGTON, D.C. — Gallup's Economic Confidence Index has risen to -31 in July, marking a modest improvement from its recent low of -45 in May. Still, Americans remain broadly pessimistic about the economy.
Gallup’s Economic Confidence 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, the highest ECI score is +56, in January 2000, and the lowest is -72, in October 2008.
After worsening between February and May amid rising energy prices and inflation tied to the Iran war, Americans’ views of current economic conditions grew slightly less negative in June and again in the latest July 1-19 poll. The July poll was conducted mostly after a brief ceasefire in the war, but mostly before hostilities escalated and sent gas prices rising again.
The percentage of Americans rating economic conditions as excellent or good has risen from 16% in May to 22% in July, while those calling it poor dipped from 49% to 44%. Approximately one-third of U.S. adults have consistently rated conditions as only fair over the same period.
Americans' outlook on the direction of the economy has also shifted since the spring. The share saying economic conditions are getting better fell from 33% in February to a recent low of 20% in May, before rising to 28% in July. Correspondingly, the share saying conditions are getting worse peaked at 76% in May and has since declined to 67%.
Republicans and Independents Driving ECI Improvement
The latest improvement in the overall ECI score is mostly driven by similar increases among Republicans (from +22 in May to +41 now) and independents (from -58 to -38). Democrats' confidence, by contrast, has only moved from a recent low of -80 in May to -76 now.
Government Is Still Nation’s Top Problem
Mentions of economic problems as the nation's most important issue this year have followed a trajectory similar to economic confidence. The two economic issues mentioned most often in July — the high cost of living or inflation and general economic issues — each peaked in May and March, respectively, at 15%, and have since dipped to 11% each. At the same time, immigration, which was cited by 20% of Americans in February and dropped to single digits in May and June, was named by 12% this month.
Still, the government has remained the top problem all year, cited by 28% in July. Unlike economic concerns and immigration, mentions of government have stayed fairly stable, ranging from 26% to 32% since January.
Partisans continue to differ sharply in their views of the most important problem facing the nation, with Democrats the most likely to name the government (at 38%, compared with 25% of Republicans and 22% of independents) and Republicans equally likely to cite immigration (at 24%, compared with 9% of independents and 5% of Democrats). Meanwhile, Democrats and independents are slightly more likely than Republicans to mention the economy in general and inflation.
Bottom Line
Even with a slight uptick in July, Americans' economic confidence remains solidly negative, with only Republicans in positive territory. Whether this modest improvement continues may depend in part on energy costs. Gas prices, which eased throughout June, have climbed again in recent weeks as the ceasefire between the U.S. and Iran has broken down and hostilities have resumed in the region. If prices at the pump keep rising, that could test whether Americans' improved economic outlook holds into the fall.
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