News
US economic confidence falls for second straight month
Story Highlights
- After improvements in early 2024, sentiments took a negative turn in April and May
- Both components of the index are at their lowest level since November
- Government, immigration and economy remain top issues cited in the US
WASHINGTON, DC — Gallup’s Economic Confidence Index registered -34 in May, reflecting a further deterioration in how Americans assess the current state of the economy as well as its trajectory.
The index improved significantly from -40 in November to -20 in March, before falling to -29 in April.
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Gallup’s Economic Confidence Index summarizes Americans’ assessments of current economic conditions (as excellent, good, only fair, or poor) and their outlook for the economy (whether they believe it is improving or worsening).
The index has a theoretical range of +100 (if all Americans rate current conditions as excellent or good and say the economy is improving) to -100 (if all Americans rate the economy as bad and say it is getting worse). In the trend of these Gallup measures since 1992, the highest ECI score was +56 in January 2000, and the lowest was -72 in October 2008.
The latest results come from a Gallup poll from May 1 to May 23, which shows that economic confidence has not improved despite somewhat positive economic news. The Dow Jones Industrial Average rose substantially for much of that period, though it lost some of those gains in the final week of the survey. Earlier this month, the U.S. Labor Department reported an increase in U.S. jobs, but at a slower pace than in most months last year.
Assessments of current economic conditions are the most negative since November
Twenty-two percent of Americans describe current U.S. economic conditions as “excellent” or “good,” down slightly from the previous month and marking the lowest number on record since December’s 22 percent.
Since the start of 2022, Americans have been consistently more likely to describe the current state of the economy as “bad.” The latest measure shows that 46% of Americans view the economy that way, up only slightly from April’s reading but the highest since November.
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The net effect of these changes is that the current conditions component of the index fell to -24 from -20 in April and is the lowest score for this component since November (-31).
Economic outlook also returns to autumn levels
Americans have been consistently more negative than positive in their assessments of the economy’s trajectory since May 2021.
The May 2024 poll found that seven in 10 Americans (70%) say the economy is “getting worse,” while 26% say it is “getting better.”
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This results in a net optimism score of -44 for the economic outlook component of the index, down from -38 in April and the lowest since November (-49).
Economy and inflation still near the top of the list of most important US problems
Americans’ decreasing confidence in the national economy is also evident in their constant mentions of the economy and inflation as two of the main factors the most important problems facing the US Immigration and government are also high on the list.
Immigration surpassed the other three in February, March and April, but mentions of the issue have dropped nine percentage points since last month.
In May, government (21%), immigration (18%) and the economy overall (17%) are statistically tied as the nation’s most important issue, while 12% of American adults cite inflation.
Mentions of immigration are down significantly from April and previous months, when they essentially tied the July 2019 reading as the highest in Gallup’s trend. Illegal border crossings between the U.S. and Mexico have remained at high levels this year.
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Partisans continue to offer differing perspectives on America’s most pressing issue, with 43 percent of Republicans and just 5 percent of Democrats mentioning immigration. Independents have become much less likely to name the issue since April, with mentions falling 14 points to the current 11 percent for that group.
Republicans (22%) are twice as likely as Democrats (11%) to cite the economy, while Democrats (27%) are more likely than Republicans (15%) to cite government. American adults in both partisan groups are about equally likely to cite inflation — 14% of Republicans and 10% of Democrats do so.
Conclusion
Economic confidence has declined over the past two months. However, it is still notably better than most measures collected in 2022 and 2023. Gallup’s monthly updates will better indicate whether this is a momentary slowdown or a significant reversal in confidence as this election year progresses. While confidence in the economy is not always a deciding factor in election outcomes, the current index number is similar to what happened when George HW Bush was defeated in 1992.
The economy and inflation remain top of mind for Americans when asked to name the biggest problem facing the nation, but fewer now mention inflation than they did between early 2022 and early 2023, a period when economic confidence was also lower than it is now. Government, which has consistently topped the list for the past decade and a half, and immigration compete with economic issues as the top issues, according to Americans. Mentions of immigration remain high, but have at least temporarily eased from the peaks recorded by Gallup earlier this year — perhaps in response to the decline in migrants crossing the border in May.
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