70-three per cent of Americans in Gallup Daily tracking over the July 22-24 weekend say the U.S. economy is getting worse.
This is up 11 percentage points from the three days ending July 6, and the worst level for this measure since the three days ending March 12, 2009.
Gallup tracks consumer perceptions of the U.S. economy daily and reports the results in three-day rolling, weekly, and monthly averages.
More Americans have been saying the U.S. economy is getting worse throughout June and early July than said this over most of the previous five months.
However, the number of Americans feeling this way has risen further over the last few weeks.
Half Rate the Current Economy “Poor”
50-one per cent of Americans rated current economic conditions “poor” over the weekend. This is up from 43% in early July, reflecting a continued deterioration in many Americans’ views.
Economic Confidence at Recessionary Levels
As a result of the declines in Americans’ assessments of the economy’s current state and its future direction, Gallup’s Economic Confidence Index fell sharply to -46 in the three days ending July 24—worsening from -41 before the weekend and -30 at the beginning of the month.
On a weekly basis, the Economic Confidence Index fell to -43 for the week ending July 24. This is its lowest weekly level since the week ending March 22, 2009.
The president, the Treasury secretary, and congressional leaders worried openly over the weekend about what might happen in the international financial markets if a debt-ceiling increase agreement wasn’t reached. They feared trouble in the Asian money markets when they opened on Sunday night and on Wall Street on Monday morning.
Although there were some losses in the money markets after a debt ceiling deal failed to materialise, these were far less than might have been expected—particularly in light of what government leaders were saying.
Still, Gallup’s data show that Americans’ perceptions of the future of the U.S. economy should be the real concern for policymakers and the overall economy. All of the talk about default likely has weighed on consumer confidence, as has the dismal jobs market, increasing gas prices, and the economic soft patch.
It may be that once the debt ceiling battle is resolved, economic confidence will return. In the interim, however, it appears consumer psychology is continuing to deteriorate rapidly. The Conference Board is likely to pick up on this when it reports its Consumer Confidence Index later this week. It is also likely to be reflected in an anemic back-to-school sales season in the weeks ahead.