Perhaps it was a response to a shabby performance by Wall Street last week or mounting unease over the Israeli-Palestinian conflict or Russia’s bold military intervention in Ukraine.
Or possibly it was sheer disgust with the “Do-Nothing” Congress and the relentless partisan sniping between President Obama and House Republicans who plan to take the president to court for executive overreach.
Whatever the reason, Gallup’s closely watched U.S. Economic Confidence Index dropped six points last week to -21, marking “the largest one-week drop since last October, and the lowest weekly index score since December,” according to the polling organization.
One-week shifts of six points or more have been rare over the past six-year history of the index. The index reflects the weekly averages of daily telephone samplings of Americans’ views on the current state of the economy and their best guesses of whether the economy is improving or getting worse.
The closer the index rate gets to zero, the more positive the attitude of the public, while the further it drops below zero, the worse the situation seems to be for Americans. As a measure of how bad things looked to the public last week, the index hasn’t fallen below -20 since the aftermath of the 16-day partial government shutdown in October 2013 – the absolute nadir in relations between Obama and congressional Republicans.
Last week, 19 percent of those surveyed declared the economy in “excellent” or “good” condition, while 35 percent said conditions were “poor.” The survey found that Americans’ perceptions of where the economy is headed are even more troubling.
“While 35 percent of Americans said the economy is getting better, 60 percent said it is getting worse,” Gallup reported. “This is a drop of eight points from the previous week, and an eight month low for the economic outlook measure.”
With the job market expanding, the unemployment rate down to 6.1 percent, housing prices rising and the Federal Reserve gradually phasing out its massive bond-buying campaign that was designed to prop up the economy, one might think that Americans would be feeling marginally better about themselves and the economy’s future.
So what gives?
Gallup says last week’s downturn in public confidence coincided with a bad week in the stock market. “The stock market drop could reflect nervousness about international tensions in the Middle East, a strained relationship between the U.S. and Russia, or the ongoing debate over immigration as children continue to cross the border in large numbers,” Gallup postulated.
The decline in confidence might have also have reflected poorer than anticipated earnings reports from Amazon, Visa and other major companies – “which may signal weaker earnings in the second half of 2014 than previously thought.”
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