Wednesday, March 25, 2015

Why Economic Confidence Is Slipping

Gallup's U.S. Economic Confidence Index broke into positive territory for the first time in seven years last December and remained positive for eight straight weeks, peaking at plus 5 in the second half of January. But it's back below par now, dipping to negative 3 for the week ending March 22.

The index had dropped below the zero line in late February but has rebounded to be in positive territory last week, before dropping down again. The index looks at Americans' views of current economic conditions, combined with their perceptions of whether the U.S. economy is getting better or getting worse.

So what's driven it back down recently? The big factor is gas prices. Gallup has found that, in recent times, economic confidence increases when gas prices have dropped in a given week, and confidence decreases when gas prices have risen. Despite everything else going on in the economy, it's still gasoline prices that most affect people.

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