Summary:
"Despite the recent upturn in the nation's equity markets, Gallup's Economic Confidence Index, at -34 during the week ending Sept. 12, confirms a downward trend in consumer confidence that started in mid-August."
More:
Although economic confidence in the U.S. appeared to be improving at this time last year, just the opposite is the case in 2010. Consumer perceptions of the U.S. economy are now substantially below the depressed levels of a year ago.
More Rate the U.S. Economy "Poor" This September Than Last
During each of the first two weeks of this month, 47% of Americans rated current economic conditions as "poor." While in September of last year, fewer Americans were giving the economy "poor" ratings than was true earlier in the year, that is not the case in 2010. In fact, consumer ratings of current economic conditions are worse now than they were a year ago.
In recent weeks, 63% of consumers have said economic conditions are "getting worse." These future expectations for the economy are among the worst of 2010 and have deterioriated substantially from the improving trend that held sway at this point in 2009.
Despite increased optimism on Wall Street that the U.S. economy will avoid a double-dip recession, Gallup's economic confidence data suggest consumer perceptions of the future course of the economy remain near their lows of the year. Neither the Labor Day holiday nor the upturn on Wall Street has been enough to shake consumers out of their doldrums.
The continued weakness in Gallup's Economic Confidence Index during the first two weeks of September suggests that consumer confidence is slightly worse now than it was in August. In turn, this implies that Friday's Reuters/University of Michigan Consumer Sentiment preliminary estimate is also likely to show a decline from August.
While economists may argue about the relationship between consumer confidence and the economy, there is no doubt that declining consumer sentiment is not good for incumbent politicians as they approach the midterm elections. Worse yet, the current trend in economic confidence continues to deteriorate and now trails that of a year ago -- making it harder to argue that the economy is now heading in a better direction than it was at this point in 2009.
