Americans’ confidence in the economy has become less rosy this month as Gallup’s Economic Confidence Index fell to 17 from August’s 24 reading, marking the lowest level since the government shutdown ended in January.
At the same time, the public is evenly divided over the likelihood of a recession in the next year. The current expectation of a recession is nine points higher than it was in October 2007, just two months before the Great Recession began but slightly below a February 2001 reading, one month before that eight-month-long recession.
The latest Economic Confidence Index results are from a Sept. 3-15 Gallup poll. As the poll was being conducted, the stock market was less tumultuous than earlier in the summer, but the August unemployment numbers showed that fewer new jobs were created than expected, concerns about the trade war with China continued and the global economy showed signs of slowing. As has been the case for months, economists continue to express concern about the possibility of a recession in the near future. The latest interest rate cut by the Federal Reserve was announced after the poll was completed.
Gallup’s Economic Confidence Index is the average of two components: Americans’ ratings of current economic conditions and their views of whether the economy is getting better or getting worse. The index has a theoretical maximum of 100, if all Americans believe the economy is excellent or good and getting better. The theoretical minimum is -100, achieved if all Americans say the economy is poor and getting worse.