A study by Gallup finds that though economic confidence is still sagging, it has been steadily improving in recent months. The study, which asked consumers if they felt the economy was getting better or getting worse, shows that while more consumers believe the economy is getting worse, this number is decreasing.
There are a number of possible reasons the index is still in the negative territory. The impending "fiscal cliff," the term for the future combination of the end of the Bush tax cuts in early 2013, the growing U.S. deficit and reduced federal budgets, may be bringing confidence levels down.
The European debt crisis may also contribute to the negative confidence levels. However, the end of the year and upcoming holiday season generally improves both economic levels and economic expectations among consumers.
Confidence regarding the economy continued to rise after the November 6 election, with the week of November 11 ending at a minus-11 index on the Gallup scale. While the week before was slightly higher at a minus-10 index level, overall this is one of the highest numbers since the 2008 financial crisis.
The index consists of two factors: economic outlook rating and current conditions rating. The current conditions rating is the percentage of those who believe the economy is good or excellent, minus the percentage who believe it is poor.
As economic confidence begins to grow, loan and mortgage application volume may increase. And while the trend has been steady, upcoming fears are also forming, with potential for future economic instability. For companies processing loan applications, the need for sophisticated application processing software becomes all the more important to keep up with changing economic attitudes.