Confidence in the United States economy has seen a modest uptick since before the U.S. election, recent polling shows, though Americans are still far from optimistic about the country's financial future under Trump.
Gallup's latest Economic Confidence Index (ECI), calculated from a poll of 1,005 adults conducted from January 2 to 5, is at -19, suggesting the public's continued gloom about the economy. Although lower than December's -14 reading, this represents an improvement from -26 in late October.
Why It Matters
The overall health of the U.S. economy was a top concern for voters going into the presidential election, with many casting their votes in the hope that Trump would be able to rein in inflation, while fostering a renaissance for U.S. trade and industry.
Along with immigration, these hopes paved Trump's path to the White House, and Gallup's results indicate that some Americans may believe an economic recovery is in the works.
However, the firm notes that the ECI improvement has been primarily driven by increased enthusiasm among Republicans, which has climbed 30 points to -42 since before the election, tempered by an identical drop in Democrats' confidence.
What To Know
Americans' views on the job market have also ticked up, according to Gallup's findings, with 48 percent claiming now is a good time to find employment, compared to 44 in October.
The percentage of people identifying the economy as the nation's biggest problem has declined from 21 percent to 13 percent over the same period, with "the government" rising to the top issue at 23 percent.
Other economic indicators, however, suggest a less sunny outlook for the U.S. economy, both in perceived and actual terms.
The Conference Board's latest Consumer Confidence Index, published Tuesday, saw a 5.4-point month-on-month drop in January, indicating reduced consumption and weaker prospects for economic growth. This follows a decline of 3.3 points in December.
The think tank's Present Situation Index—which aggregates consumers' evaluation of current business and labor market conditions—also dropped 9.7 points in January.
With grocery costs still climbing, unemployment at high levels, and businesses bracing for the imminent impact of Trump's tariffs, the U.S. economy is still far from being in the clear, despite some signs of growing optimism.
What People Are Saying
Dana M. Peterson, chief economist at The Conference Board, said: "All five components of the [Consumer Confidence Index] deteriorated but consumers' assessments of the present situation experienced the largest decline. Notably, views of current labor market conditions fell for the first time since September, while assessments of business conditions weakened for the second month in a row.
"Meanwhile, consumers were also less optimistic about future business conditions and, to a lesser extent, income. The return of pessimism about future employment prospects seen in December was confirmed in January."
What Happens Next?
On Wednesday afternoon, following two days of meetings, the Federal Reserve is expected to announce that interest rates will remain steady following three successive cuts, and calls for a fourth from President Trump.
Trump's 25-percent tariffs on Canada and Mexico are set to come into effect on February 1, the president told reporters last week. During her inaugural Tuesday briefing, White House Press Secretary Karoline Leavitt said that this date was "still on the books."
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About the writer
Hugh Cameron is Newsweek Live News Reporter based in London, U.K. His focus is reporting on international politics, conflict, and ... Read more