Americans' economic confidence has fallen sharply amid the coronavirus pandemic and stock market plunge, a recent Gallup poll has found.
Gallup's Economic Confidence Index fell from +41 in February (its highest point in almost 20 years) to +22 in March, Gallup said.
U.S. economic confidence is likely even lower now than what the March 2-13 poll suggests, given that the market plunge has intensified amid tougher virus curbs.
Gallup has measured economic confidence since 1996, including monthly measures since 2001. The 19-point drop in economic confidence from February to March is one of the largest that Gallup has measured from one month to the next since monthly measurement began. The only larger one-month declines were a 27-point drop between January and February 2001, just before the start of the 2001 recession, and a 22-point decline between June and July 2002. Both of those drops came during a period of decline for most internet-based company stocks.
Americans continue to evaluate current economic conditions positively, with 54% describing them as "excellent" or "good" and 11% as "poor." In February, 63% of Americans rated economic conditions as either excellent or good.
Declines among all political party groups were evident in March, but confidence fell more among Democrats and independents than among Republicans.
The Economic Confidence Index is based on responses to two measures -- Americans' evaluations of current economic conditions and their perceptions of whether the U.S. economy is getting better or worse. The index has a theoretical maximum of +100 and a theoretical minimum of -100. The current +22 index score indicates Americans remain more positive than negative about the economy.
Meanwhile, stocks tumbled 9% on Wall Street Wednesday and wiped out the last of the gains for the Dow Jones Industrial Average since President Donald Trump’s inauguration. Even prices for investments seen as very safe fell as investors rushed to raise cash amid fears about the coronavirus pandemic.
Markets have been incredibly volatile for weeks as Wall Street and the White House acknowledge the rising likelihood that the outbreak will cause a recession. The typical day this month has seen the stock market swing up or down by 4.9%. Over the last decade, it was just 0.4%, the Associated Press reported.
It was just a day before that the Dow surged more than 5% after Trump promised massive aid to the economy, but the number of infections keeps climbing, and the Dow slumped to its lowest level since 2016. The S&P 500, which dictates how 401(k) accounts perform much more than the Dow, is down 32% from its record set last month, though it’s still up nearly 8% since Election Day 2016.
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