Economic-Confidence Index at Near 9-Year Highs
Americans’ confidence in the economy remained steady last week, holding at the highest level since mid-August and one of the highest levels in the past nine years.
Gallup’s US Economic Confidence Index averaged +7 for the week ending 12 November.
Amid a booming stock market and a falling unemployment rate, the index has now registered its strongest 2-week performance since the second and third weeks of August, when confidence stood at +8 and +11, respectively.
In particular, the October jobs report, which the Labor Department released on Nov 3, showed the unemployment rate falling to a 17-year low.
Last week’s score also ranks among the highest weekly readings since Y 2008, with only 14 other weeks registering a higher level of confidence.
All 14 have occurred since Donald Trump won the Y 2016 Presidential election.
Before that event, during the Hussein Obama era, US economic confidence was negative throughout Y’s 2009-2016, save for a 9-week period at the beginning of Y 2015. Since then, the measure has been positive for all but 2 weeks.
Americans’ confidence in the US economy remained strong last week, at least by the standards of the past nine years. This most recent rally may be a reaction to the recent tide of good economic news, including the positive October jobs report.
And while major stock market indexes, such as the Dow Jones Industrial Average, registered their first weekly losses in nine weeks last week, they remain well above where they were one year ago.
Gallup’s index is the average of 2 components, they are:
- How Americans rate current economic conditions and,
- Whether they feel the economy is improving or getting worse.
The index has a theoretical maximum of +100 if all Americans were to say the economy is doing well and improving, and a theoretical minimum of -100 if all were to say the economy is doing poorly and getting worse.
Reports showed US consumer prices edged up 0.1% in October, lifting the Y-Y increase in the core CPI to 1.8%, while retail sales unexpectedly rose in October, firming the case for a December interest rate hike.
But a flattening yield curve, which is at its lowest level since November 2007, is concerning investors as they worry the Fed may raise interest rates too much, slowing longer term inflation and growth.
To be sure, President Trump last week sent Tweets pointing to the “great confidence” in his administration’s efforts, noting the record level the stock market hit Monday.
He added that the administration is at work on cutting taxes.
Stock market hit yet another all-time record high yesterday. There is great confidence in the moves that my Administration….