US: Gallup US ECI

Tue Nov 03 07:30:00 CST 2015

Actual Previous
level -13 -14

Gallup's Economic Confidence Index averaged minus 13 in October. This is essentially the same as the minus 14 average for September. The index has declined since peaking at plus 3 in January 2015, and has remained below minus 10 for four months.

Since March, Americans have consistently viewed the outlook for the economy more negatively than they have viewed current economic conditions. From a broader perspective, the main cause for the decline in the index since January is the drop in Americans' economic outlook, which has fallen more steeply than their views of the current economy. Both components have been level since August.

In October, 24 percent of Americans described current economic conditions as "excellent" or "good," while 31 percent rated them "poor." This resulted in a current conditions average of minus 7. The economic outlook average was minus 19 for this same period. This was the result of 38 percent of Americans saying the economy is "getting better" and 57 percent saying it is "getting worse."

Gallup's Economic Confidence Index is a composite of two questions that Gallup asks daily of a nationally representative sample of 500 adults, aged 18 and older, and reports weekly based on approximately 3,500 interviews. One question asks Americans to evaluate current economic conditions; the other measures their perceptions of whether the economy is getting better or getting worse. The two questions have equal weight in the index, and are reported without revisions or seasonal adjustments. They can also be analyzed separately, providing insight into changes in the overall index. The survey is conducted with respondents contacted on landlines and cellphones.

In today's fast-moving, information-loaded environment, consumer attitudes can, and often do, change multiple times between the beginning and the middle or end of a month, and the Gallup index keeps up with these fluctuations. Followers of the metric therefore develop a keen understanding of the degree to which various economic and political events -- including monthly BLS jobs reports, major changes in the stock market, and significant congressional budget actions -- affect consumer attitudes.

Investors are highly sensitive to consumers' mindset as a potential leading indicator of consumer spending behavior. The Gallup index provides a timely reading of consumer attitudes, facilitating precise evaluations of consumers' mood and the drivers of consumer attitudes. The index gives investors a valuable tool to help predict what the other indexes will report each month, which in turn can help investors anticipate any major stock market reactions.

Econoday reports monthly data. Gallup reports results of the ECI on on a daily, weekly, monthly and quarterly basis.

The Gallup Economic Confidence Index has a possible maximum of plus 100 (reached if all Americans rate current economic conditions as excellent or good, and all Americans say the economy is getting better) and a possible minimum of minus 100 (reached if all rate the current economy as poor, and say the economy is getting worse). The zero midpoint indicates either neutral or mixed attitudes about the economy. Gallup has asked the component questions periodically since 1992, monthly since October 2000, and daily since January 2008. Since 1992, the index has ranged from a high of plus 56 in January 2000, coincident with a period of robust U.S. economic performance and a balanced federal budget, to a low of minus 65 in October 2008, during the global financial crisis.