- The economic confidence index goes from -39 to -45
- Declining confidence due to poor assessments of current conditions
- Inflation binds the government as the most important problem facing the United States
WASHINGTON, DC – Gallup’s Economic Confidence Index measured -45 in May, down from -39 in each of the previous two months. This is Gallup’s lowest trend reading during the coronavirus pandemic, and likely the lowest confidence since the end of the Great Recession in early 2009.
The Gallup Economic Confidence Index is a summary measure of Americans’ perception of current economic conditions and their outlook for the economy. It has a theoretical range of +100 (if all respondents say the economy is great or good and getting better) to -100 (if all say it is bad and getting worse).
The latest results are based on a Gallup poll from May 2-22, conducted at a time of record high gas prices, high inflation, government reports of declining economic growth in first quarter and a plummeting stock market. Low unemployment is a rare bright spot, but employers are still struggling to find workers to fill needed jobs, contributing to ongoing supply chain issues.
Gallup has measured Americans’ perceptions of the economy on its multi-day telephone surveys since 1992, but rarely did so between 2009 and 2017. It’s possible that confidence was lower at some point during those years than it is now.
Confidence was significantly lower than today in February 2009, when the index recorded -64 in the Gallup survey for that month.
Americans less positive about current conditions
Currently, 14% of American adults rate economic conditions as “excellent” or “good”, while 46% say they are “poor”, and 39% rate them as “only fair”. The Confidence Index takes into account the net of excellent and good answers versus bad answers, which is -32 this month. In April, 20% of Americans rated the economy positively and 42% said it was bad, a net -22.
Meanwhile, 20% of Americans say the economy is improving and 77% say it is getting worse, essentially the same as April and March.
Inflation continues to be a top US problem
Although not as common as during the 2007-2009 recession, economic concerns feature prominently when Americans are asked, unprompted, to name the most important issue facing states. -United. Eighteen percent mention inflation specifically and 12% mention the economy in general terms. Inflation mostly ties government as the top overall problem, with 19% citing government.
Other frequently cited issues include immigration, race relations or racism, abortion, unification of the country, crime and violence.
Mentions of inflation have stabilized since March, with readings of 17% or 18%, after rising throughout the fall and winter months. They remain relatively high compared to recent history but have been higher in the past, including 52% in October 1981, 49% in January 1982 and 31% in April 1982, around the time inflation was for the last time at its current rate. Inflation was cited by an average of 1% of Americans between 1990 and 2021.
More generally, the answers to the most important problem are similar to those of April. The main exception to this is abortion, which was increased from 1% to 5% after a draft notice of a Supreme Court ruling that would overturn Roe vs. Wade has been disclosed. Most of those who mention abortion are Democrats or skinny Democrats, indicating the response primarily reflects pro-choice Americans’ concerns about overturning the decision, rather than Republicans’ concerns about abortion in itself.
The 5% mentioning abortion is low in absolute terms, but it’s the highest number Gallup has measured for the issue since it began tracking mentions of it in 1984. Ten percent of Democrats and Democrats Those leaning name abortion, tying it with mentions of inflation (13%) and race relations (10%) among this group, but still behind government (17%) as the top issue.
Americans’ economic pessimism has deepened this month, and is likely the lowest since the end of the Great Recession. Last year, as inflation started to rise, most other economic factors remained healthy, including economic growth, stock values and unemployment. But economic growth contracted in the first quarter, and if the second quarter shows a similar decline in economic output, the United States will meet the usual definition of a recession used by economists. Such a designation could further erode U.S. economic confidence.
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