Americans' confidence in the economy continues its post-election improvement. Confidence has now been above the neutral mark for three consecutive weeks. In November, confidence averaged plus 1, up from minus 11 in October. This was the third time in Gallup's trend that the monthly average has been positive, along with January 2015 (plus 3) and February 2015 (plus 1). The Economic Confidence Index (ECI) is based on Americans' evaluations of current conditions and their perceptions of whether the economy is getting better or worse. It has a theoretical range of minus 100 (if all Americans rated the economy as "poor" and said it was getting worse) to plus 100 (if all Americans rated the economy as "excellent" or "good" and said it was getting better).
Since 2008, the index has mostly been in negative territory. The major exception came during an eight-week period from late December 2014 through mid-February 2015 when U.S. consumers reacted to a sustained drop in gasoline prices and the weekly average for the ECI reached as high as plus 5.
The recent increase in economic confidence appears mostly to be a reaction to the presidential election -- chiefly among Republicans, who are much more likely to view the economy positively after Donald Trump's victory.
Gallup's Economic Confidence Index is a composite of two questions that Gallup asks daily of a nationally representative sample of 500 adults and reports weekly based on approximately 3,500 interviews. The first asks Americans to evaluate current economic conditions and the other measures their perceptions of whether the economy is getting better or getting worse. The two questions have equal weight in the index. The survey is conducted with respondents contacted on landlines and cellphones.
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 Gallup.com 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.
Register for regular updates here and manage your email preferences.