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Americans' confidence points to economic health

Americans are increasingly confident about the U.S. economy -- and with good reason.
A rainbow forms over a neighbourhood following a massive snow storm in West Seneca, New York on Nov. 24, 2014
A rainbow forms over a neighbourhood following a massive snow storm in West Seneca, New York on Nov. 24, 2014
Every afternoon, polling nerds like me get new data to chew on: the results of the latest Gallup Daily Tracking poll. And every afternoon, we look at results like President Obama's approval rating.
But a little further down, there's something called the "U.S. Economic Confidence Index," which measures an important question: are Americans feeling better or worse about the economy?
Last week's results were a welcome sight.

Gallup's U.S. Economic Confidence Index last week tipped into positive territory for the first time since before the Great Recession started in December 2007. The index averaged +2 for the week ending Dec. 28, a possible sign that Americans are feeling the accelerating economic recovery. U.S. consumers' attitudes are ending the year on a high note, as their confidence in the economy is back in the black for the first time since the Great Recession and the stunted recovery. And, judging from past years, economic perceptions are more likely than not to continue to improve.

This is obviously only one survey, but it coincides with the latest CNN poll that found "for the first time in seven years, more than half of Americans think the economy is in good shape."
And why should you care? Because this has real-world effects: Americans who are feeling increasingly confident about the economy are more likely to spend, invest, and hire.
Indeed, the fact that these numbers are so unusual, at least since the start of the Great Recession, makes them all the more significant.
Annie Lowrey noted this morning that we've seen some economic head-fakes in recent years, which naturally leads many to wonder whether recent progress will fade.

[W]e've been fooled by bursts of growth a few times since the financial crisis. How do we know that the recovery is really picking up this time?

The short answer is, we don't know for sure; all we can do is consider the evidence.
That said, the evidence looks pretty good. We've had periods of growth in recent years, but not growth as strong as the latest data. We've seen periods of job growth, but not nearly as many jobs as have been created recently. We've seen improvements to Americans' confidence in the economy, but not this much confidence.
There are potential pitfalls and unpredictable crises, but the public seems to be increasingly confident, and with good reason.