Ahead of Election, Americans' Confidence in Economy Steady
Wednesday, November 2nd, 2016
Americans' confidence in the U.S. economy has been stable for three months since the Democratic National Convention held in late July helped boost assessments of the economy. The index averaged -11 in October, similar to the -11 and -10 recorded in August and September, respectively.
From a long-term perspective, Americans' views of the economy have been relatively stable since August 2015. That month marked the end of the index's 16-point decline from +3 in January 2015. Since then, the index's monthly averages have remained within a narrow range of -10 to -15.
Gallup has tracked economic confidence daily for the past three presidential election years. In previous presidential election years:
Gallup's U.S. Economic Confidence Index fell to a record low of -60 in October 2008 as the U.S. experienced its worst financial crisis in decades. The plunge in economic confidence likely contributed to Americans' decision to eject Republicans from the White House and elect Democrat Barack Obama in early November.
The index stood at -17 in October 2012 -- which was, at the time, tied for the highest monthly score since Gallup began tracking economic confidence daily in 2008. Although Americans were more negative than positive about the economy, their views were much less negative than when Obama took office. Obama won re-election the next month.
The current -11 for October is better than the scores for either of the two previous election-year Octobers. But unlike the past two elections, economic confidence has not been trending in a positive or negative direction in the months preceding Election Day, but rather has remained flat.
While Gallup did not track economic confidence on a daily basis before 2008, it did conduct regular surveys measuring Americans' economic confidence in presidential election years from 1992 to 2004. The methodologies used in the pre-2008 and 2008-2016 polls differ enough that precise comparisons cannot be made. Generally speaking, however, Gallup's data from the pre-2008 polls show:
Americans' ratings of the economy were quite negative in 1992 just before George H.W. Bush lost his re-election bid.
Ratings were very positive in 2000 when Republican George W. Bush won a contested election to succeed Democrat Bill Clinton.
They were slightly more positive than negative when Bush won re-election in 2004. That October, more Americans named the Iraq War as the nation's most important problem than named the economy.
Americans More Negative About Economy's Outlook Than Current Conditions
Gallup's U.S. Economic Confidence Index is the average of two components: 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 Americans were to say the economy is doing poorly and getting worse.
In October, about as many Americans said the economy is "excellent" or "good" (27%) as said the economy is "poor" (29%), resulting in a current conditions score of -2. Americans' assessments of the current state of the economy are about as positive as they have been in the past eight years; the best score for this index component is +1, recorded in January 2015.
Americans remain much more negative about the direction the economy is headed. Thirty-eight percent believe the economy is "getting better" and 58% say it is "getting worse," resulting in an economic outlook score of -20. This index component has fallen sharply since reaching its post-recession high of +5 in January 2015, though it has held steady over the past several months.
Gallup's U.S. Economic Confidence Index has been largely stable, though in negative territory, for the past 17 months. Americans' economic perceptions could indicate how willing consumers are to spend their discretionary income or could signal real shifts occurring in the economy. But how Americans feel the economy is doing, particularly when many think the economy is in bad shape, can be the reason why some voters decide to vote the way they do. In 2008, for instance, Americans' confidence in the economy fell steeply in the months preceding Election Day, just as Obama jumped to his largest lead of the campaign season.
In 2012, by contrast, economic confidence remained negative but demonstrated clear improvement, particularly toward the end of Obama's first term. The index in October 2012 matched the highest score recorded since 2008, suggesting that many Americans, particularly Democrats, felt conditions were improving.
This year, however, confidence is neither strengthening nor faltering. This could indicate that Americans voting primarily on economic issues may be more divided on which candidate to support than was the case in 2008 and 2012.