At the beginning of the summer, polls suggested that Americans were almost starting to feel better about the economy. But as back-to-school season picks up, consumer confidence in the economy remains stuck in the negatives — and it's heading further south.
Gallup's Economic Confidence Index registered minus 14 last week. In late May and early June, the index registered an all-time weekly high of minus 3, it but hasn't gone above minus 10 since mid-July.
Forty-two percent of Americans say the economy is improving, while 54 percent say it's getting worse. Twenty percent rated current economic conditions "excellent" or "good," and 35 percent called them "poor."
The Gallup Poll attributes the results to discouraging employment news, rising mortgage rates, and other factors. While the unemployment rate fell to 7.4 percent in July when the economy added 162,000 jobs, the numbers were fewer than expected. At that rate of job growth, it would take about seven years to close the job gap created by the recession, The New York Times reported. Also in July, the rate at which new homes were sold fell 13.4 percent compared with June. Mortgage rates, however, have been steadily rising since May.
As the U.S. approaches the debt ceiling, moving ever closer toward default, more dips in confidence should be expected in the fall. Americans' outlook on the economy has shown a tendency to coincide with such political events. Confidence plummeted in the summer of 2011 when Congress agreed to a deal at the last minute to raise the debt ceiling, which led to a downgrade of the country's credit rating. Gallup also registered decreases at the end of last year during the fiscal-cliff debate and in early March when sequestration went into effect.
In a letter to House Speaker John Boehner on Monday, Treasury Secretary Jacob Lew projected that the department's "extraordinary measures" currently being undertaken to avoid default will be "exhausted in the middle of October." If history has a way of repeating itself, the prediction does not bode well for Americans' feelings about the recovering economy.