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RAPAPORT... While some sort of solution to the U.S. government shutdown and debt ceiling increase appears possible this afternoon or evening, political games surrounding these events have driven consumer sentiment to its lowest level since November and December 2011, according to Gallup.
Gallup's Economic Confidence Index averaged negative 39 points this point, down five points from the previous week, which followed a 12 point drop during the first week of the government shutdown.
Since Gallup began daily tracking of economic confidence in 2008, it has been as low as negative 65 on a weekly basis, reaching that level the week of October 6, 2008 after Congress passed and President George W. Bush signed the Troubled Asset Relief Program (TARP) to prevent large financial institutions from failing in response to the financial crisis. The index has stayed in negative territory throughout the daily tracking era, with the high point a negative 3 score for the week of May 27 this year.
The survey has a theoretical minimum of negative 100 points a maximum of 100 points, if all consumers thought the economy was ''excellent or good'' and ''getting better.'' However, this week, seven in 10 consumers believed the economy was getting worse, resulting in a negative 46 point economic outlook score, down 24 points in the past two weeks.
In a separate survey, Gallup's Standard of Living Index dropped to a 10 month low to 31 points, its lowest reading since January. The highest it has been since tracking began in 2008 was 45 points, attained in May. Gallup concluded that the recent decline echoed sentiments in consumers' attitudes about the U.S. economy. An eight-point decline in the index over the past month is seen fairly evenly across major income groups, Gallup found.
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