Despite increased optimism on Wall Street that the U.S. economy will avoid a double-dip recession, Gallup's economic confidence data suggest consumer perceptions of the future course of the economy remain near their lows of the year. Neither the Labor Day holiday nor the upturn on Wall Street has been enough to shake consumers out of their doldrums.
The continued weakness in Gallup's Economic Confidence Index during the first two weeks of September suggests that consumer confidence is slightly worse now than it was in August. In turn, this implies that Friday's Reuters/University of Michigan Consumer Sentiment preliminary estimate is also likely to show a decline from August.
While economists may argue about the relationship between consumer confidence and the economy, there is no doubt that declining consumer sentiment is not good for incumbent politicians as they approach the midterm elections. Worse yet, the current trend in economic confidence continues to deteriorate and now trails that of a year ago -- making it harder to argue that the economy is now heading in a better direction than it was at this point in 2009.
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