Gallup's Economic Confidence Index fell to negative 14 for the week ending July 26, a 10-month low and down from negative 12 a week earlier.
has gradually slid since peaking at positive 5 in late January, a record high since Gallup began tracking economic confidence daily in 2008. The weekly numbers have consistently stood in negative territory since mid-March.
Gallup's Economic Confidence Index averages two components: how Americans view the economy currently and whether they see it improving or getting worse.
The current conditions component slid 4 points in the latest week to negative 9. The economic outlook component registered negative 18, unchanged from a week earlier.
So what's causing the pessimism?
"A number of factors may be affecting how Americans view the direction of the country's economy, including unsettled economic conditions in Europe and in China and the volatility of the U.S. stock market," writes Rebecca Riffkin of Gallup.
"All of these could be making Americans--particularly those with higher incomes- more pessimistic."
As for stock market volatility, the CBOE Volatility Index soared 27 percent in the week ended July 27, though it has fallen back 19 percent since then, to 12.56 percent.
Jeremy Grantham, chief investment strategist at money manager GMO, isn't so optimistic on the economy either.
He sees GDP growth of 1.5 percent going forward, compared to an average rate of 3.2 percent since 1948. The economy expanded 2.3 percent in the second quarter.
Grantham, writing in GMO's quarterly commentary,
cites several problems facing the economy.
- "The age of plentiful, cheap resources is gone forever." Oil is a particular problem, he says.
- "Climate Problems." He means that dreaded global warning.
- "Income inequality." The middle class and poor are getting poorer.
- "Deficiencies in the Fed: a counter-productive job description, badly executed." The Fed's job description, of course, is to boost employment and control inflation.
- "Investment bubbles in a world that is, this time, interestingly different." The differences: "profit margins in the U.S. seem to have stopped mean reverting in the old, normal way, and some real estate markets have bubbled up and then stayed there."
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