Bad news for Democrats as they gather for the start of their national convention in Charlotte: A survey showed U.S. manufacturing contracted for a third straight month in August, and the Gallup Poll’s monthly economic confidence index hit its 2012 low.
The Institute for Supply Management’s factory index fell to 49.6 last month, the lowest since July 2009, from 49.8 in July, the Tempe, Arizona-based group said today. Economists in the Bloomberg survey projected an August reading of 50, which is the dividing line between expansion and contraction. Measures of orders and production dropped to three-year lows.
Meanwhile, Gallup’s economic confidence index has dropped 10 percentage points from -17 in May, and the figure for August matches the -27 it registered in January, Gallup said.
A politically troubling finding in the index for President Barack Obama’s re-election bid is that, among independent voters, economic confidence sagged to a new 2012 low of -33. That’s an 11 percentage point drop since May for independent voters, the electoral bloc Obama needs to win a second term.
Obama supporters may be able to console themselves that the overall Gallup economic confidence index is better than the -52 that was registered in August, 2011. That’s when the financial markets were in turmoil following the stand-off in Congress over extending the government’s borrowing authority, a political fight that prompted Standard & Poor’s to strip U.S. debt of its AAA rating for the first time in history.
It dropped to -60 one day in October, 2008, during the financial crisis the preceded Obama’s election the following month.