Tags: Gallup | Economic | Confidence | Election

Gallup: Economic Confidence Drops to Lowest Level Since Election

Image: Gallup: Economic Confidence Drops to Lowest Level Since Election
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By F McGuire   |   Wednesday, 29 Mar 2017 09:57 AM

Americans' confidence in the U.S. economy tumbled along with the Dow Jones industrial average last week.

Though still in positive territory, Gallup's U.S. Economic Confidence Index (ECI) dropped six points to a score of +5 for the week ending March 26.

This is the lowest weekly average since the presidential election in November, Gallup reported.

“Americans' falling confidence in the economy may be tied to events in Washington and on Wall Street. Last week, the Dow logged its worst week since September as congressional Republicans ultimately failed to vote on legislation that would repeal and replace the Affordable Care Act. However, confidence waned prior to the effort to replace the ACA dying in Congress on Friday. This suggests that the broader GOP infighting earlier in the week, rather than the decision to pull the bill itself, may have been a factor, in addition to the market's poor performance,” Gallup reported.

Rank-and-file Republicans became significantly less confident in the economy last week, with their index score falling to a still-robust +42 from +52 the week before. Independents, too, lost confidence, with their score retreating back into negative territory to -1 from +6 the previous week. Democrats' confidence in the economy changed little, with their current -20 score similar to the -18 they had in the week prior.

“Donald Trump's election spurred a renewed level of confidence among his fellow Republicans, which boosted the overall average for the index into positive territory. But, if his supporters perceive that the promises he made during the campaign are not being kept, or if Republicans lose faith in Trump's negotiating prowess, the party rank and file could become further depressed,” Gallup reported.

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 were to say the economy is doing poorly and getting worse.

Meanwhile, U.S. economic growth is expected to accelerate this year and next, yet remain modest, even if Trump's promised tax cuts and infrastructure spending are implemented, a survey found.

The economy will grow a solid 2.3 percent this year and 2.5 percent in 2018, according to 50 economists surveyed by the National Association for Business Economics. Those rates would be up from 2016's anemic pace of 1.6 percent, the Associated Press reported.

Still, those rates are below the 3 percent to 4 percent growth that Trump has promised to bring about through steep corporate and individual tax cuts and more spending on roads, airports and tunnels. Most of the economists surveyed assume that a tax reform package will be approved by Congress this year. About two-fifths expect an infrastructure spending proposal to pass this year, while rest forecast it will happen in 2018 or beyond.

(Newsmax wire services contributed to this report).

© 2017 Newsmax Finance. All rights reserved.

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Americans' confidence in the U.S. economy tumbled along with the Dow Jones industrial average last week.
Gallup, Economic, Confidence, Election
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2017-57-29
 

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