Economic confidence has declined slightly, following a record surge in recent months, mostly due to concerns on the left, according to a poll released Tuesday.
President Donald Trump entered office at a time when economic confidence was near a record high. Economic confidence reached an all-time high of 11 points following the Nov. 8 election. Gallup found economic confidence has remained elevated but declined to positive 7 points in February.
“Around President Donald Trump’s inauguration last month, the index reached highs not seen before in Gallup’s nine years of tracking economic confidence,” the analysis detailed. “Although the index has dropped several points in the first half of February, it remains higher than most of the readings Gallup has recorded since 2008.”
Republicans had a dismal view of the economy leading up to the election at negative 43 points. Their confidence shot up to a positive 16 points after the election. Democrats lost only a few points at first, but that has fallen further with the new president now sworn in.
“The drop in Americans’ economic outlook is due to a decrease in optimism among Democrats and independents,” the analysis said. “Republicans, who largely prompted the recent increase in overall economic confidence, have maintained their newfound optimism.”
Democrats were considerably more confident in the economy at a positive 27 points prior to the election. Their confidence fell to a negative 41 points last week. The confidence level was notably high during the presidential transition period because the poll asks about current economic conditions and outlook.
Former President Barack Obama was still in office through most of January which helped those on the left view the current state of the economy favorably. Republicans gained confidence following the election because they had a favorable view of the future.
Gallup first began conducting its economic confidence survey back in 2008. The low level of confidence over the years is likely the result of the last recession almost a decade ago. The economic downturn was followed by a very long recovery. Trump has made job creation a critical part of his agenda.
Economic confidence has a lot of room for improvement at only 7 points. The index rates economic confidence on a scale of 200 possible points, from -100 to +100, based on two main factors. It looks at how Americans rate current economic conditions and whether they feel the economy is improving or getting worse.
The economy has shown many positive trends in recent years, but there have still been major issues. The labor market, for instance, has been steadily growing and is even close to full employment. The labor force participation rate, however, has failed to reach the level it was at before the recession.
“This imbalance can perhaps be remedied by continued progress in gross domestic product growth, low unemployment, and gains in the stock market,” the analysis said. “If positive signs such as these aren’t visible to Americans, it could further chip away at their economic outlook.”
The recession was sparked by the subprime mortgage crisis and the financial crisis of 2007. The survey found economic confidence started at negative 24 points when it was first conducted in 2008. It dropped to a record low of negative 65 points in the following year.