Gallup’s Economic Confidence Index is like a barometer for the atmosphere of economic malaise that has settled over the United States. The post-crisis climate has been generally stormy, with high unemployment, low growth, and (depending on whom you ask) a chance of deflation. At no point since Gallup began tracking economic confidence in 2008 has the index broken into positive territory, indicating that at no point since the crisis have more Americans been optimistic about the economy than pessimistic.
The forecast for January looks like it will be more of the same. In the second week of the month, the ECI fell to -16 from -13, with confidence about both current conditions and the outlook declining. The net outlook score for the week was -12, down from -8 in the prior week, representing 54 percent of Americans who think the economy is getting worse. Similarly, just 17 percent of Americans say the economy is currently “excellent” or “good,” while 36 percent say it is “poor.”
The latest wave of pessimism was likely fueled by a particularly underwhelming December jobs report, which showed payroll growth of just 74,000.
A huge factor in how people feel about the economy is the status of their personal financial situation, and a separate survey conducted by Gallup found that more Americans believe they are worse off financially now than they were a year ago. The survey found that 42 percent of Americans believe they are worse off compared to 35 percent who think they are better off, while the remainder believe they are in about the same position.
The percentage of Americans who believe they are worse off is up from a post-crisis low of 34 percent, which occurred at the end of 2012. The percentage of Americans who believe they are better off is down slightly from a post-crisis high of 39 percent, which occurred in the middle of 2013.
Gross domestic product may be growing and the labor market may be healing, but it is clear that the recovery to date has been far from healthy, and Gallup’s data suggest that the economy has a long way to go before people believe that the recession is truly behind them. The coming year — an election year in which economic policy is expected to take center stage — could mark a transition, though.