by Bill McBride on 10/08/2013 02:33:00 PM
Tuesday, October 08, 2013
No surprise ... from Gallup: Weekly Drop in U.S. Economic Confidence Largest Since '08
Americans' confidence in the economy has deteriorated more in the past week during the partial government shutdown than in any week since Lehman Brothers collapsed on Sept. 15, 2008, which triggered a global economic crisis. Gallup's Economic Confidence Index tumbled 12 points to -34 last week, the second-largest weekly decline since Gallup began tracking economic confidence daily in January 2008.Click on graph for larger image.
Fiscal brinksmanship in Washington is related to many of the largest weekly drops in Americans' confidence in the economy since 2008. ... Americans' confidence in the economy fell eight points during two separate weeks in July 2011, as leaders in Washington debated over whether to raise the debt limit or default on the nation's debts. ... Similarly, economic confidence could continue to fall in the coming days and weeks as Congress and the president work to reach an agreement to raise the debt ceiling by the upcoming Oct. 17 deadline.
Still, economic confidence bounced back within several months of the 2011 debt crisis and the downgrading of the U.S. credit rating. ... This suggests that these fiscal debates may not affect consumer confidence in the same long-term negative way that hits to the economy -- like the 2008-2009 economic recession -- do.
This graph from Gallup shows economic confidence since 2008. The recession is obvious - and so is the threat to not "pay-the-bills" in 2011.
Here we go again ... time to end the shutdown.
Posted by Bill McBride on 10/08/2013 02:33:00 PM