Gallup says W.Va. most pessimistic state for economic confidence
CHARLESTON, W.Va. -- For the third year in a row, West Virginia is the most pessimistic state in the country when it comes to economic confidence, according to a Gallup study.
West Virginia had the lowest economic confidence average in 2012, at "negative 42," listed on the report as "-42," which is well behind Minnesota's "negative 8" average, according to the report.
The Gallup Economic Confidence Index is a composite of Americans' ratings of current U.S. economic conditions and their perceptions of the economy's direction. The index has a theoretical maximum of 100 (if all respondents rate the economy "excellent" or "good" and say it is getting better) and a theoretical minimum of "negative 100" (if all rate the economy "poor" and say it is getting worse).
West Virginia has been the least economically confident state since 2010, when the state's average was "negative 46." No other state that year had confidence averages lower than "negative 39."
The confidence index average for each of the 50 states was in the negative numbers in 2012. But the District of Columbia was the only with a positive average of "29."
The Mountain State's "high level of unsatisfaction" in President Obama may be one reason for the state's lack of confidence, West Virginia Commerce Secretary Keith Burdette said.
Gallup has long observed that economic confidence is a complex consumer attitude that reflects real world economic factors, but is also sensitive to the U.S. political environment, the study stated.
"Members of the current president's party typically express more confidence than members of the opposing party," according to the study. "Thus, with a Democrat in the White House since 2009, Democrats' economic confidence has been significantly higher than Republicans' [confidence]."
Burdette said the Gallup poll measures "perception and not reality," and how the public perceives the nation's economy as still not being in the right place.
He said there is a correlation between the fact that West Virginia has been the most pessimistic state the past three years and Obama serving as president.
"By virtue of the election, the state doesn't share the president's approach to a lot of economic issues, which sours their opinion of the economy as a whole," Burdette said. "He didn't win a single county in West Virginia. You have to believe the perception is West Virginians don't agree with the way he is taking the country and that probably clouds their vision."
Burdette said the nation is economically weary because there aren't enough jobs.
The state's unemployment rate grew in December from 7.3 percent to 7.5 percent, according to "Jobs Count," a monthly report released by the West Virginia Center on Budget and Policy.
Many people are still looking for work, or at least better work, Burdette said.
"There are a lot of people working well below where they think they should be or where they could be because of their skill level. That creates unease and frustration," he said.
Despite every state remaining negative in its outlook for the U.S. economy, 48 states (with the exception of Wyoming and Vermont) saw gains in economic confidence in 2012, according to the study.
Even West Virginia saw a seven-point gain, an increase from 2011's "negative 49" average.
Some states, such as Delaware, Maine, and Hawaii, saw 20-point gains in confidence.
"The wide range in improvements ... suggests that perceptions of national conditions can be influenced by local or regional economic conditions as well as possibly biased by political sensibilities," according to the study.
Nationally, the Gallup Economic Confidence Index averaged "negative 21," up 16 points from "negative 37" a year earlier.
Burdette said much of the nation outside of West Virginia is seeing economic indicators, such as the housing market, "move in a generally more positive fashion."
Stability in the housing market, an increase in home prices, and improvements in home construction are helping, he said. Americans buying at a time when mortgage rates are low are also economic indicators that the economy is improving.
But that isn't the case here, he said.
"We haven't seen the hyperinflation or deflation in the home market. Our home values have increased, but very marginally in a fairly regular consistent basis that people don't actually see it until they sell their property," Burdette said. "Consequently, being able to see that in West Virginia is not as obvious. The only place we saw great changes was in the Eastern Panhandle."
To view the Gallup Economic Confidence Index, visit http://www.gallup.com/poll/160232/states-gains-economic-confidence-2012.aspx.
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