Positive ratings of the national economy have dropped five points points in the past week. A 15-year high was set last January, but sentiment has slipped amid signs of an economic slowdown. After peaking a year ago, confidence is now its lowest in three years. The result sounds an alarm because steeply dropping consumer confidence was the single best predictor of the 1990-91 recession.
Confidence is much higher now than it was then.
But 55 percent of Americans say they think the country is headed for a recession. Confidence weakened this fall as rising energy prices deflated ratings of the buying climate. Now the damage has spread. The number of Americans who say the national economy is in good shape has lost 11 points in the last three weeks, including five points this week alone. That's its steepest drop on record, cutting this measure to its lowest since April 1998.