US: Gallup US ECI

Tue Oct 03 07:30:00 CDT 2017

Actual Previous
level 4 +6

Confidence in the economy declined slightly to plus 4 in September, down from August's plus 6. While the ECI climbed past the plus 10 mark in January, September's score of plus 4 represents a continuation of economic attitudes that have held since May, apart from a brief increase in early August after the Dow hit 22,000.

Even if overall confidence in the economy has stagnated recently, confidence remains notably higher compared with any month between 2008 and November 2016. In particular, Americans' ratings of current economic conditions have remained at or near post-recession highs virtually all year, including last month. Moreover, the current conditions component has averaged plus 10 or higher every month this year, a level it had never hit in the nine years prior. The component was either positive or non-negative in only a handful of months during that period.

The current conditions component measured plus 13 in September, the result of 34 percent describing the economy as "excellent" or "good" minus the 21 percent describing the economy as "poor." September's current conditions score essentially ties the plus 14 observed in August -- the highest monthly reading in the 2008-2017 Gallup Daily tracking trend.

However, economic expectations dimmed slightly in September. Over the course of the month, half of Americans said economic conditions were "getting worse," while 44 percent said conditions were "getting better," resulting in an economic outlook score of minus 6. This is down four points from August's minus 2 outlook score.

While economic confidence faltered somewhat in September, it essentially reverted to the level seen consistently since May.

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 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.