U.S. economic confidence increased in August
Last week, Gallup's U.S. Economic Confidence Index averaged +11, up three points from the previous week.
The index has increased by nine points over the past three weeks and is now at its highest level since mid-March.
Gallup's U.S. Economic Confidence Index is the average of two components: how Americans rate current economic conditions and whether they believe 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.
Americans' economic perceptions have been mostly positive throughout 2017. This is a fundamental change from 2008 through most of 2016, when pessimism prevailed.
Still, the Economic Confidence Index has had some ups and downs in 2017. After hitting a nine-year high of +16 in early March, the index declined throughout the spring. For much of the summer, confidence hovered near zero, the neutral midpoint for the index - indicating that Americans had highly mixed views about the state of the economy.
In August, confidence has rallied. Gallup's U.S. Economic Confidence Index jumped five points during the week of July 31-Aug. 6, coinciding with the Dow Jones industrial average finishing above 22,000 for the first time.
Subsequent economic news in August may have solidified or expanded economic confidence, including last week's report that U.S. retail sales rose 0.6% in July, the best one-month gain for this indicator in seven months.
The U.S. Bureau of Labor Statistics also announced that weekly jobless claims fell to a six-month low for the week ending Aug. 12.
Amid the bundle of good economic news, Americans' perceptions about the current state of the economy reached a post-recession high last week.
For the week ending Aug. 20, 37% of Americans described economic conditions as "excellent" or "good," while 19% rated conditions as "poor." As a result, the current conditions component stood at +18, up slightly from +16 the week before.
Americans' economic expectations turned positive last week for the first time since April, with the outlook component rising four points to +3. This reflects 48% of Americans saying the economy is "getting better" and 45% saying it is "getting worse." ■