Gallup's economic confidence index has plunged all the way back to 2010 levels, and is now at negative 31. It was at a negative 21 in January. signaling that rising costs and continued weakness in the jobs market are working together to slam consumers.
From the Gallup release:
On the other hand, American consumers face several major challenges. Soaring gas and food prices not only reduce disposable income but also discourage additional spending as the cost of necessities increases. Global events, continued political battles about the budget in the nation's capital, and a weak, if modestly improving job market add to consumer uncertainties. As a result, it is not surprising that consumer confidence plummets even as Wall Street continues to do well.
However, if consumers continue to lack confidence and spending doesn't increase, it is hard to see how the U.S. economy can continue its modest improvement. In turn, it would seem Wall Street and Main Street will have to align at some point going forward. Either Wall Street will prove right and economic conditions on Main Street will improve or the reverse will prove to be the case.
Pretty negative outlook from Gallup. Considering the long-term political implications, the decline across the board in confidence, regardless of party, is certainly worrying for Democrats.
Optimism about the future of the economy declined across all political parties during the first quarter. Democrats remain the most optimistic, with 45% saying things are getting better, but this is down from 55% in January and 52% a year ago. Independents' economic optimism is at 31% and Republicans' at 21% -- both down from January.
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