With Small Business Optimism cratering to 15 month lows and CFO's skepticism at 2 year lows [7], it is no surprise that 'average joe' is also feeling a little less confident (despite the exuberance in equity markets). Gallup's U.S. Economic Confidence Index [8] registered at -11 this week, which marked an eight-month low for the index. While current conditions are weak, more worryingly, the economic outlook has tumbled to its lowest since October with 56% of Americans saying "the economy is getting worse."
The weekly index made significant gains in the latter half of 2014, coincident with the decline in gas prices, and peaked in January at +5. Since then, scores have generally declined, with the latest figures representing the index's lowest since late October.
[9]
The economic outlook score was also unchanged, at -16, the result of 40% of Americans saying the economy is "getting better," while 56% said it is "getting worse."
[10]
Bottom Line
Much has occurred over the past week to leave Americans' confidence in the economy depressed. On Wednesday, a technical glitch suspended trading on the New York Stock Exchange for hours, on a day marked by significant stock losses. Meanwhile, abroad, Greece gathered a lot of attention, with the country's potential exit from the eurozone possibly having economic ramifications in Europe, the U.S. and elsewhere.
However, confidence had been trending downward even before the stock market glitch and the Greek referendum on austerity, so the recent good news may help confidence only to a limited extent.
Source: Gallup [8]
