Confidence in the U.S. economy plummeted in the week the budget deadlock resulted in the partial shutdown of the federal government, Gallup said Tuesday.
Gallup's Economic Confidence Index dropped by 12 points to minus 34 points in the week, the second-largest weekly decline since January 2008, when Gallup began tracking confidence in the U.S. economy on a daily basis, the Princeton, N.J., polling company said.
The largest weekly decline occurred in September 2008, the week the investment bank Lehman Brothers failed, Gallup said.
However, many of the largest sudden drops in the Economic Confidence Index can be attributed to government actions – or inaction – Gallup said.
The index dropped nine points in late February 2013 as the White House and Congress failed to come up with a compromise budget that eventually resulted in the federal spending cuts known as sequestration. And the index dropped eight points as the lawmakers came to an agreement in February 2011 in an 11th hour deal that came close to shutting down the government, Gallup said.
In two separate weeks in July 2011, the confidence index dropped eight points. That was the month lawmakers flirted with allowing the government to go into default as Republicans used the debt ceiling vote as leverage to force a showdown over reducing the size of the federal debt.
At minus 34, Gallup's weekly index has now hit its lowest point since December 2011, Gallup said.
Gallup said results of the Confidence Index, taken from 3,580 surveys conducted Sept. 30 through Oct. 6, include a margin of error -- it can be said with 95 percent certainty -- of plus and minus three percentage points.