U.S. Economic Confidence Hangs in the Balance as Federal Sequester Approaches

Share With Friends! Email this to someoneShare on Facebook0Tweet about this on Twitter0Share on Google+0Share on LinkedIn0Digg thisPin on Pinterest0Share on StumbleUpon0Share on Tumblr

By Glynn Wilson

Data from the Gallup Poll shows that the lack of an ability to compromise on the part of officials in Washington to avert automatic, across-the-board federal spending cuts by the sequestration deadline of March 1 is beginning to hurt the economic confidence of Americans.

Gallup’s Economic Confidence Index was minus 13 in the week ending Feb. 24, compared with the previous week’s minus 11. It reflects a decline in Americans’ confidence from the five-year weekly high of minus 8 during the week ending Feb. 3.

“Although the weekly average showed little change, confidence declined in the latter part of the week,” according to Gallup.

Gallup_econconf2-26-13

Daily tracking three-day rolling averages showed economic confidence falling to minus 17 at the end of last week — “one of the lowest such averages since early January,” according to Gallup. “This decline may reflect Americans’ concerns about the budget sequestration and/or rising gas prices.”

Gallup’s Economic Confidence Index is based on Americans’ ratings of current U.S. economic conditions and their assessments of whether the economy is getting better or worse.

Americans’ outlook for the nation’s economy showed signs of slipping last week, falling to minus 10 from minus 7 the prior week. The latest reading reflects a majority of Americans — 53 percent — saying the economy is getting worse, and 43 percent saying the economy is getting better.

At the same time, Americans’ confidence in current economic conditions held steady. Gallup Daily tracking finds 20 percent of Americans rating current U.S. economic conditions as excellent or good, while 36 percent say they are poor. The net current conditions score of minus 16 is on par with minus 15 from the prior week.

At the tail end of last week, Americans’ economic outlook score declined to minus 16, with 40 percent saying the economy is getting better and 56 percent saying worse in Feb. 22-24 tracking. Evaluations of current conditions were more stable, with a minus 17 index score based on 20 percent rating conditions as excellent or good and 37 percent saying they were poor.

Bottom Line

“As federal lawmakers debate how to handle the automatic spending cuts scheduled to go into effect March 1, Americans’ confidence in the economy is showing some signs that the uncertainty may be taking a toll,” Gallup concludes. “The decline in the three-day rolling average at the end of last week suggests that the budget sequestration battle may negatively affect Americans’ economic confidence in the week ahead. Still, it is possible that Americans’ economic confidence will bounce back quickly as it did after the fiscal cliff debate concluded.”

Analysis

One fact that has been totally absent from the news coverage of this issue is that the budget is mostly the responsibility of the House of Representatives, now in the hands of a majority of Republicans who campaigned against federal spending and President Barack Obama and have shown no willingness to compromise with the president to avert an economic crisis. According to the U.S. Constitution, all money bills must originate in the House. The president can only recommend a budget, and the Senate only has the job of approving what the president and the House agree upon.

The media coverage of this debate has been objective only in the sense of being “fair and balanced,” quoting the Republicans in the House blaming the president and the White House officials blaming the Republicans in Congress. Is there not one national journalist who took Political Science 101, where students learn that money bills must originate in the House?

The American people should be shocked at the horrendously ignorant coverage of this issue by most of the news media in America. When will they learn that objective journalism means reporting the facts based on the best science available, not reporting both sides — especially when one side is clearly lying for political purposes?

American Democracy will never get back on track until we create a Web Press where real journalists with some academic experience tell it like it is and speak truth to power.

© 2013, Glynn Wilson. All rights reserved.

Share With Friends! Email this to someoneShare on Facebook0Tweet about this on Twitter0Share on Google+0Share on LinkedIn0Digg thisPin on Pinterest0Share on StumbleUpon0Share on Tumblr
Print

Comments

comments