Americans' economic confidence hit its highest level of the past year in January and is approaching its highest level in four years, according to new survey data released by the Gallup Organization. But despite this rebound, overall economic confidence only regained the high it reached in May 2011; it remains down somewhat from its 2010 levels.
But, economic confidence varies considerably by state, as the map below shows.
Outside of wealthy and all-urban D.C., it was highest in Minnesota, North Dakota, Nebraska, and Maryland. Economic confidence was lowest in West Virginia, Maine, Oregon, Rhode Island, and Mississippi.
Gallup's Economic Confidence Index is based on answers to four survey questions. The first two ask respondents whether the current economic conditions are "good" or "bad." The second set asks whether the economy is getting "better" or "worse." According to Gallup, the index has a range of -100 to +100. Negative scores indicate respondents are less satisfied with the economy.
With the help of my MPI colleague Charlotta Mellander, I took a quick look at the economic, social and demographic factors that might have a bearing on the various dimensions of economic confidence, running basic correlations between them and variables like income, education, occupational class, religion, and political affiliation. Of course the associations we found are only that, associations. Correlation is not causation, and other factors we have not taken into account may complicate the picture. Nonetheless, the findings from this analysis provide much food for thought.
Income plays a role, as expected. It's positively associated with the percent of people who saw current economic conditions as good (.49) and negatively associated with the percent that viewed them as bad (-.36) and getting worse (-.55). There was no correlation between income and the percent of respondents who saw economic conditions improving.
Education is an even bigger factor. Economic confidence was closely associated with the percent of adults in a state who hold college degrees. The share of college grads was positively associated with the percent of people who saw current economic conditions as good (.73) and negatively associated with the percent who saw them as bad (-.43) and getting worse (-.76).
Class factors in as well. States with greater concentrations of knowledge, professional, and creative workers had higher levels of economic confidence than those with larger blue-collar workforces. The percentage of creative class workers was positively associated with the percent of people who saw current economic conditions as good (.71) and getting better (.29) and negatively associated with percent who saw economic conditions as bad (-.41) and getting worse (-.77).
The opposite was true of states with larger concentrations of the working class. The percentage of blue-collar workers was positively associated with the percent who believed current economic conditions were bad (.28) and getting worse (.67), and negatively associated with the perception of current economic conditions being good (-.61).
Economic confidence is closely associated with broader measures of happiness and overall well-being. Happiness was positively correlated with the share of state residents who say the economy is currently good (.33) and getting better (.60), and, negatively correlated with the percentage who believe the economy is currently bad (-.49) and getting worse (-.60). Economic confidence is likewise associated with levels of life expectancy.
The basic basic pattern holds for life expectancy across states. It was positively correlated with the percentage of residents who perceive the economy to be getting better (.56), and negatively correlated with the percentage who see current economic conditions as bad (-.38) and getting worse (-.62). It is worth noting that the results for both happiness and life expectancy likely reflect the underlying effects of income, education, and class.
Naturally, perceptions of the economy are also reflected in respondents’ political leanings. States where more people identify as liberal perceive the economy to be getting better (with a correlation of .55), while more conservative states perceive it as getting worse (.59).
The president’s approval rating, not surprisingly, turns on economic confidence. Obama's overall approval rating was higher in states where more people perceive economic conditions to be getting better (with a correlation of .60). Conversely, his disapproval rating was higher in states where more people perceive the economy to be getting worse (.64).
National elections, as pundits often point out, turn not so much on the state of the economy on the first Tuesday in November as on the trends over the preceding months. Recently improving economic confidence would seem to favor Obama on that score.
Top image: A construction site in San Francisco. (Reuters/Robert Galbraith)