The FINANCIAL -- Americans' confidence in the U.S. economy tilted slightly negative last week for the first time in 2017. Gallup's U.S. Economic Confidence Index was -1 for the week ending Oct. 15 -- down seven points from the previous week.
Though a first for 2017, the index has flirted with negative territory at several points in recent months -- with a score of zero in late June, for example. But even with this week's dip into negative territory, confidence remains higher in 2017 than in any year since Gallup began tracking the index in 2008.
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.
Americans' waning confidence is largely attributable to a sharp decline in their outlook for the economy's future. For the week ending Oct. 15, 42% of national adults said the economy is "getting better" while 53% said it is "getting worse," resulting in an economic outlook score of -11. This is down from -3 the week prior and is, by one point, the lowest score for the outlook component in 2017 so far.
Americans' assessment of the economy's current health took a smaller hit last week and remains positive. Thirty-two percent of Americans described the economy as "good" or "excellent," while 23% described it as "poor," resulting in a current conditions score of +9 -- down from +14 the previous week. This is the first time since late July that this component has dipped below +10.
Last week's drop in Americans' overall confidence was largely driven by a more negative than usual assessment of the direction in which the economy is headed. This could be related to the recent report by the Bureau of Labor Statistics, which found a loss of 33,000 jobs in September after a series of damaging storms in Florida, Texas and elsewhere. Although the same report found the unemployment rate at a 16-year low, consumers may have been alarmed by the report of job losses. The drop last week could also be related to other factors and could represent a short-term shift that could quickly reverse course -- as it did when the index reached zero in a July weekly average.
If that bad news about jobs proves temporary, confidence is likely to recover -- particularly if the stock market continues to maintain its recent gains. However, as is clear from the 2008-2016 trend, there is plenty of room for confidence to go lower should November bring a second consecutive month of discouraging labor news.