The Gallup Economic Confidence Index continued its six-month slide last week, hitting a 10-month low of negative 14.
In late January, the gauge stood at positive 5, its highest reading since Gallup began the index in
2008. The score has resided in negative territory since mid-March.
The index represents the average of two components: Americans' rating of the current economy and their view as to whether it's improving or getting worse.
In the week ended July 26, the current conditions measure dropped four points to negative 9, accounting for the full slide of the overall index. The economic outlook score totaled negative 18, unchanged from the prior week.
So what's going on?
"The recent drop of the current conditions component comes on the heels of a new path for solving the Greek debt crisis and amid a tumultuous period for Chinese stocks,"
writes Gallup's Justin McCarthy.
Chinese stocks have continued their plunge this week, with the Shanghai Composite Index dropping 10 percent.
"The instability abroad could be fueling Americans' doubts about the health of the U.S. economy." Falling U.S. stock prices may have played a role too, he says. The S&P 500 lost 2.8 percent last week.
But fear not: ace analyst Edward Yardeni, president of Yardeni Research, says the next recession may not come until March 2019. That's based on the movement of the Index of Coincident Economic Indicators (CEI) over the past five business cycles,
he explains in a commentary provided to Newsmax Finance.
"It has taken 68 months — from January 2008 through October 2013 — for the CEI to fully recover from its severe decline during 2008 and early 2009," he writes. The average time for a full recovery in the last five cycles was 26 months, with a range of 19-33 months.
"The good news is that the average increase in the CEI following each of those recovery periods through the next peak was 18.6 percent," with an average period of 65 months and a range of 30 to 104 months, Yardeni says.
"If we apply this average to the current cycle, then the CEI would peak in 45 more months, during March 2019, with a substantial gain from here."
The last economic-growth period lasted from 2001-2007.
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