Are American Consumers Shaking Off Economic Concerns?
The economy is arguably much stronger now than it was in 2011, during the last debt ceiling crisis, but consumer confidence fell to much lower levels during early October’s 16-day government shutdown and corresponding political crisis over spending and the size of the U.S. debt.
“Fiscal brinksmanship in Washington is related to many of the largest weekly drops in Americans’ confidence in the economy since 2008,” wrote Gallup’s Alyssa Brown on October 8, explaining the 12-point drop in the firm’s weekly reading of its Economic Confidence Index. That decline translated to an overall reading of -34. The next week, the index returned a reading of -39. However, the fiscal deal lawmakers inked on Thursday, while only kicking the country’s budgetary and debt ceiling problems into 2014, helped American confidence in the economy improve, with the index edging up to -36.
But from a wider perspective, the Economic Confidence Index, which is based on Americans’ assessments of current economic conditions and their perceptions of whether the economy is getting better or worse, has remained “entrenched in negative territory,” according to Gallup. Comparatively, in late May and early June of this year, readings hovered around -3. Alongside weak economic confidence, Americans have expressed concerns about the labor market, reporting worse hiring situations at their places of employment so far in October.