The FINANCIAL -- Americans' confidence in the economy continues its post-election improvement, with Gallup's U.S. Economic Confidence Index averaging +8 for the week ending Dec. 4. That is the highest weekly average in Gallup's tracking trend, which dates back to January 2008.
Last week's confidence average included a score of +12 for Dec. 2-4 interviewing, the highest three-day average in Gallup's tracking trend.
Gallup's U.S. Economic Confidence Index is based on Americans' evaluations of current conditions and their perceptions of whether the economy is getting better or worse. It has a theoretical range of -100 (if all Americans rated the economy as "poor" and said it was getting worse) to +100 (if all Americans rated the economy as "excellent" or "good" and said it was getting better).
Since 2008, the index has mostly been in negative territory. The major exception came during an eight-week period from late December 2014 through mid-February 2015 when U.S. consumers reacted to a sustained drop in gasoline prices and the weekly average for Gallup's index reached as high as +5, according to Gallup.
Confidence has now been above the neutral mark for three consecutive weeks. In November, confidence averaged +1, up from -11 in October. This was the third time in Gallup's trend that the monthly average has been positive, along with January 2015 (+3) and February 2015 (+1).
Republicans See Economy in More Positive Light After Election
The recent increase in economic confidence appears mostly to be a reaction to the presidential election -- chiefly among Republicans, who are much more likely to view the economy positively after Donald Trump's victory. Republicans have shifted dramatically from a decidedly negative evaluation of the economy before the election to a positive one after it.
For the week before the election, the index among Republicans was -42. Now, it is +10. Democrats, who were quite positive about the economy before the election (+30), remain so, but to a far lesser degree (+11). The net result of these changes is that Republicans and Democrats are now about equally confident in the economy.
Independents are slightly less optimistic, with a +4 index score, but that is also a significantly improvement from their -20 score the week before the election.
Before the election, Democrats were much more optimistic than Republicans were about both current economic conditions and the outlook for the economy. Democrats still rate current economic conditions better than Republicans do, while Republicans are more positive than Democrats are about the economy's direction. These shifting perceptions likely result from the political reality: A Democratic president is in office and currently presiding over the nation, but a Republican president is set to take over early next year.
In the most recent weekly average, 58% of Republicans said the economy was "getting better," and 37% said it was "getting worse," for an economic outlook score of +21. That is sharply higher than the -66 average among Republicans (15% "getting better" and 81% "getting worse") just before the election.
Meanwhile, 49% of Democrats said the economy was "getting better," and 46% said "getting worse," for an economic outlook score of +3. That is down from +30 among Democrats before the election.
For the week ending Dec. 4, 37% of Democrats rated current economic conditions as "excellent" or "good," while 18% said they were "poor." That yielded a +19 current conditions score among Democrats, down 11 points from before the election. Republicans' score on that component was -2 for last week, up 17 points from the week before Trump was elected. Last week, 25% of Republicans rated current conditions as "excellent" or "good," and 27% said they were "poor."
Americans' evaluations of the economy have changed considerably since Election Day. Republicans are much more likely to say the economy is "getting better" and even see current economic conditions in a more positive light. Democrats' confidence has declined, but they still rate the economy more positively than negatively -- a situation that may persist as long as President Barack Obama is in office.
Republicans' increase in economic confidence since the election has been greater than Democrats' decrease. Independents have also gained confidence and now are more positive than negative about the economy. These factors have led to a net increase in Gallup's Economic Confidence Index among all Americans, from -11 the week before the election to last week's +8.
Confidence may stay higher as long as both Democrats and Republicans have reasons to be positive about the economy, given the current and future political situations. Outside the political sphere, the economy has also seen record-high stock prices in recent weeks, reports of greater economic growth in the third quarter than in past years and a positive unemployment report released late last week.
Given the strong influence of partisanship on how Americans view the state of the nation, including the economy, Democrats' confidence may sharply decline once Trump is in office. The degree to which Republicans' views improve beyond what their current levels may determine whether confidence nationally remains high or retreats.