Government Shutdown is Further Eroding Economic Confidence

The latest Gallup Economic Confidence Index shows that the government shutdown has caused confidence in the US economy to drop sharply.  Gallup computes the Index by combining responses to two questions asking respondents to rate economic conditions in the country today, and whether they think economic conditions in the country as a whole are getting better or getting worse. The Index is computed by adding the percentage of Americans rating current economic conditions (("excellent" + "good") minus "poor") to the percentage saying the economy is ("getting better" minus "getting worse"), and then dividing that sum by 2. The Index has a theoretical maximum value of +100 and a theoretical minimum value of -100. Values above zero indicate that more Americans have a positive than a negative view of the economy; values below zero indicate net-negative views, and zero indicates that positive and negative views are equal.

The economic confidence score of -34 is the lowest since December 2011, and has decreased sharply from -13 in August, to -19 at the end of September, and -34 in the first few days of October.

"How much lower economic confidence might fall over the days and weeks ahead depends on what the Congress ends up doing in regard to both the current government shutdown and the looming debt ceiling deadline on Oct. 17. One glimmer of more positive news is the fact that after a similar plummet in confidence during the August 2011 debt ceiling crisis, confidence regained its previous footing within several months."

Read more:
http://www.gallup.com/poll/165257/economic-confidence-plummets-gov-shutdown-begins.aspx

Positive Momentum in Economic Confidence

A recent report released by Gallup Economy indicates that Americans' confidence in the US economy is the highest it has been in four years.  The monthly average of economic confidence in November (-13) is significantly improved from confidence levels recorded during the onset of the Great Recession in January 2008 (-32).  Throughout the month of November, Economic Confidence was relatively stable, ranging from a high (-10) in the week leading up to the presidential election and dropping slightly toward the end of the month (-15) as the fiscal cliff approaches.

The Gallop Economic Confidence Index determines monthly averages of economic confidence by averaging Americans' interpretation of current economic conditions and their future expectations for the US economy. Although in November more Americans viewed the economy as "poor" (38%) than "excellent" or "good" (17%) and the net score of Americans' opinions of the current US economy was negative (-11), the average rating of the current US economic conditions in November was the highest it had been since March 2008 (-20).  Additionally, while more Americans believe that the US economy is getting worse (50%) rather than better (45%) for an economic outlook net score of (-5), the economic outlook score is steadily improving.   Therefore, while Americans' assessment of the current economy and their economic outlook is bleak, it is the best it has been nearly five years.

Certain subgroups of the American population are more confident in the US economy.  Notably, Democrat (30), Black (30), Hispanic (6), and 18-29 year old (3) Americans reported the highest levels of confidence in the US economy, whereas married (-20), elderly  (-23) White (-23) and Republican (-59) Americans expressed the least confidence in the US economy.

American Perception of Job Climate at Highest Since Financial Crisis

According to a survey conducted by Gallup, 24% of Americans think of now as a good time to find a quality job.  Out of context 24% may seem low, but this number reflects the highest the workplace outlook has been since the financial crisis began in March in 2008.

Perceptions differ from region to region, with people in the Midwest and South viewing their prospects more negatively, at 22% and 19% respectively, with Americans from the West (31%) and East (28%) tend to view their job climates more favorably. 

These more positive perceptions occur in tangent with two indexes created by Gallup that are currently experiencing upticks,  the Job Creation Index and the Economic Confidence Index, which can be seen here.