US Economy Confidence Hits Record Low Amid Inflation and Iran Conflict
Quick Look
- New Gallup research shows only 16% of Americans view the economy as excellent or good, with 76% believing conditions are worsening.
- The Economic Confidence Index is at its lowest since Oct 2022 (-45), driven by inflation and high gas prices linked to the Iran conflict.
AI-generated summary
Why It Matters
New research indicates a significant decline in American economic confidence, with only 16% viewing the economy positively. This is attributed to ongoing inflation and high gas prices, exacerbated by the conflict with Iran. The Economic Confidence Index has fallen to its lowest point since October 2022.
Just 16 percent of Americans think the economy is currently excellent or good, according to new Gallup research, a troubling sign for the president and Republicans in a midterm season focused on affordability.
About half of respondents told Gallup in early May that conditions are poor, as the Iran war drives ongoing inflation and high gas prices.
Overall, the research outfit’s Economic Confidence Index has fallen to -45, the lowest reading since October 2022, amid Biden-era inflation. Among U.S. adults, 76 percent told Gallup economic conditions are getting worse.
Republicans remain supportive of the president, scoring Trump at plus-22 on the confidence index, but even this figure is at its lowest since Trump’s second term began.
The Gallup research comes on the heels a string of troubling polls for the president.
Sixty-three percent of Republicans approve of the Trump economy, an Associated Press-NORC Center for Public Affairs Research poll released on Wednesday found. That’s down from roughly 80 percent approval in February, prior to the Trump administration’s strikes on Iran.
Within the movement, there’s a split between the president’s MAGA faithful and the wider Republican party.
In a poll released Thursday, just 36 percent of non-MAGA GOP respondents told Fox News they approved of the president’s economic record, while MAGA diehards approved at 74 percent.
In May, American consumer confidence fell to an all-time low, according to the University of Michigan's Surveys of Consumers.
The Independent has contacted the White House for comment.
In April, wholesale inflation climbed to its highest level since 2022, when the country was gripped with pandemic-era price hikes.
The president has brushed off consumer concerns tied to the ongoing Iran conflict.
"I don't think about American financial situation — I don't think about anybody,” the president told reporters at the White House earlier this month. “I think about one thing: We cannot let Iran have a nuclear weapon."
The president may be outwardly confident, but inside the White House, officials reportedly fear the ongoing war with Iran could push gas prices beyond the $5.02 a gallon record set under the Biden administration.
The average price of gas has more than doubled since the start of Trump’s military action against Iran, with the average Friday at $4.55, according to the AAA.
“The White House staff is absolutely, totally freaked about bond yields and gas prices,” an unnamed person close to the White House told Politico.
White House Spokesperson Taylor Rogers disputed the report, saying it was “false” and that the news outlet was “relying on anonymous sources to push fake news.”
What to Watch
AI outlook — possibilities, not facts
Continued negative economic sentiment among Americans.
Very likely · Within weeks
Increased pressure on the administration to address inflation and gas prices.
Very likely · Within weeks
Further volatility in bond yields and gas prices.
Likely · Within weeks
Open Questions
- What specific actions will the administration take to address economic concerns?
- How will the Iran conflict continue to impact global markets?
- Will consumer confidence rebound in the coming months?
- How will the split within the Republican party affect future economic policy debates?
