The latest Gallup poll reveals that while Americans’ economic confidence remains negative, there has been a steady improvement compared to last year.
In March 2024, the Economic Confidence Index (ECI) stands at -20, similar to February’s -22, but significantly higher than the readings near -50 recorded last fall.
This marks the highest point since August 2021 when it was at -12.
The Economic Confidence Index is calculated based on Americans’ evaluations of current economic conditions and their outlook for the economy. It ranges theoretically from +100 (indicating the most positive view) to -100 (the most negative view). The latest poll results indicate that 30% of U.S. adults perceive economic conditions as excellent or good, 30% rate them as only fair, and 39% deem them poor. This results in a -9 score on the current conditions component of the index, reflecting improvement from previous months.
Regarding the future economic outlook, 33% of Americans believe conditions are getting better, while 63% think they’re worsening. Despite economic optimism remaining stable at 32% since last month, it has been gradually increasing since October.
Partisan perspectives significantly influence economic evaluations, with Democrats showing the highest confidence (ECI score of +35), followed by independents (-28) and Republicans (-62). Since October, all partisan groups have shown improved confidence, particularly Democrats, whose ECI score rose by 35 points. This is good news for President Biden.
Republicans predominantly hold a negative view of the economy, with 87% believing it’s deteriorating. Independents’ perspectives are less negative, with 65% seeing a worsening economy, while Democrats are mostly optimistic, with 64% believing the economy is improving.
Economic confidence is a crucial factor in presidential elections, especially for incumbent presidents seeking reelection. Historical trends indicate that when economic confidence is high or low, election outcomes tend to align accordingly. However, mixed economic attitudes can lead to varied election results.
Despite the current negative ECI score not being favorable for President Biden, Gallup trends suggest that economic confidence can change significantly in a short time.
Past examples include the rapid decline during the start of the pandemic in 2020, followed by a recovery to neutral territory by the time of the election. Conversely, in 2012, a notable increase in the index likely contributed to Obama’s reelection, while during the 2008 financial crisis, the index remained low for an extended period.
