The latest research from Gallup shows that Americans are regaining confidence in the US economy, but that last August’s Congressional dispute over raising the debt ceiling is still affecting Americans’ attitudes. The index dipped to -52 in August, the lowest reading on US consumer confidence since a -58 reading in February of 2009. The December 2011 index stands at -38, about halfway back to the -21 reading in January of this year, the highest confidence index of the past four years.
As might be expected, Americans with higher incomes have more confidence in the US economy than do those Americans with middle and low incomes. The index reading for middle and low income Americans is -29, while the reading for higher income Americans is -39.
When asked about economic conditions, 44% of higher income respondents described them as “poor” and 51% of middle and low income respondents described economic conditions as “poor.” Neither group had changed its opinion much from the November reading.
Gallup draws this conclusion:
Increased confidence appears to be largely driven by a sharp improvement in consumers’ future expectations for the U.S. economy as opposed to a significant change in current economic conditions.
So, while the current economy may stink, falling unemployment and falling gasoline prices are giving most Americans hope that a turnaround is solidly underway. But a glance at the chart shows that we’ve been here before and every time hope has crumbled. This time could be different, but with a coming political battle over the payroll tax extension and continuing concern over the debt crisis in Europe there are plenty of reasons to expect the old pattern to hold.