Economy Watch: Consumers Unfazed by Trans-Atlantic Turmoil

A recent Gallup survey suggests consumers aren't particularly worried about Brexit having an impact on the U.S. economy.
Credit: Gallup U.S. Economic Confidence Index, June 2016
Credit: Gallup U.S. Economic Confidence Index, June 2016

Are American consumers particularly worried about the impact of last month’s Brexit on the U.S. economy? It’s an important consideration, since consumer opinion—even on relatively remote events—affects consumer spending. The answer, fortunately, seems to be that they’re not so worried.

At least, that’s one conclusion to be drawn from a recent Gallup survey of consumer attitudes. Gallup’s June data show no immediate effect on Americans’ confidence in the U.S. economy. The event did cause instantaneous turmoil in U.S. markets—investors are known to be a skittish lot—but the long-term effect on the U.S. economy (and Americans’ confidence in it) isn’t clear.

Gallup’s U.S. Economic Confidence Index averaged -14 in June, the same reading as in April and May, the company reported on Tuesday. Confidence ticked slightly higher earlier in the month—with the index averaging -12 each of the first two weeks—but retreated near the end, with subsequent weekly readings of -15 and -17. That isn’t much of a negative movement, and doesn’t seem to have much to do with events across the Atlantic.

The index is the average of two components: How Americans rate current economic conditions and whether they feel the economy is improving or getting worse. The index has a theoretical maximum of +100 if all Americans were to say the economy is doing well and improving, and a theoretical minimum of -100 if all Americans were to say the economy is doing poorly and getting worse. The current somewhat negative numbers seem to be a legacy of the bumpy first quarter of this year.