NEW YORK (MainStreet) – A Gallup poll released this morning shows significant gains in consumer confidence – just as government figures show that public debt now matches the overall size of the U.S. economy.
First, the good news.
The Gallup Economic Confidence Index rose to -27, a big improvement over the -50 readings the index saw this summer. The N.J.-based polling firm says the consumer confidence numbers are at their highest levels since May 2011. The survey, which tracked a random sample of 3,428 U.S. adults from Jan. 2 to Jan. 8, saw a seven-point rise in the past week alone, and is 16 points higher since the beginning of November.
As always with these kinds of polls, you need to take the results with a grain of salt. In relative terms, Americans are far and away still down on the economy, it’s just that a few more are finally starting to see the clouds lifting. For example, Gallup reports that 11% of Americans say the economy is either “good” or “excellent,” while 44% rate it as “poor.”
Still, progress is progress, and consumer sentiment is tacking higher these days, although Gallup does a fair job of pointing out that consumer confidence is a fragile beast.
“The decline in the government’s U.S. unemployment rate – from 9.2% in late August to 8.5% in December as measured by Gallup – helped lift Americans' economic mood at the end of 2011, and any setbacks in that area could be equally effective at stifling it,” Gallup’s Lydia Saad wrote in a report on the poll findings. “Also, rising gas prices, political conflict in Washington over payroll taxes and the debt ceiling, and continued softness in housing all represent potential drags on consumer optimism.”
But just as Americans may be showing some slivers of optimism about the economy, out comes data from the federal government that shows the national debt is now as large as the entire U.S. economy. The amount of money owed by Uncle Sam has crested $15.23 trillion, which roughly matches the $15.17 trillion in the entire value of goods and services generated in the U.S. as of September 2011.
Furthermore, the longer-term outlook shows that the national debt will grow faster than the U.S. economy. In fact, the U.S. economy would have to grow at a 6% rate just to keep up (right now, gross domestic product is averaging about 2% annually, and from 1947 to 2011, it’s only averaged 3.28%, according to the financial website TradingEconomics.com).
If you think that’s bad, the numbers could get even worse. The White House’s own numbers show the national debt exceeding $26 trillion 10 years from now – a mind-boggling number by any measure.
It seems that while consumer confidence is rising, a looming shadow may be rising even higher.