Confidence Begins to Sag
NEW YORK, Aug. 31, 2005 -- -- Consumer confidence has begun to sag, suggesting that the resilience consumers have shown in the face of soaring gasoline prices may be wearing thin.
The ABC News/Washington Post Consumer Comfort Index has lost five points in the last two weeks, dropping from -7 to -12 on its scale of +100 to -100 to match its lowest since early June.
Gas now averages $2.61 a gallon, matching a nominal high set last week and up 51 cents in the last three months. In a separate ABC News/Washington Post poll released today, two-thirds of Americans say gas prices are causing them financial hardship (more than a third call the hardship "serious") -- back up after a dip last week -- and six in 10 believe the Bush administration could take measures to reduce the cost.
Just 22 percent approve of Bush's work on the problem -- his lowest approval rating by far among seven issues tested in the poll. A huge 73 percent disapprove.
INDEX -- The ABC/Post CCI is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week 37 percent rate the economy positively, down five points in the last three weeks. About as many, 36 percent, call it a good time to buy things, while more, 59 percent, say their own finances are good.
The buying climate and economy ratings are both three points off their long-term averages. Ratings of personal finances are two points above average.
TREND -- At -12, the index is close to its average of the year so far, -11, and just below its long-term average, -9 in polls since December 1985. The index reached an all-time high of +38 in January 2000, and an all-time low of -50 in February 1992. This year, it's been as high as -7 and as low as -19.
GROUPS -- As usual, the CCI is higher overall in better-off groups. It's +34 among higher-income Americans while -58 among those with the lowest incomes, +2 among college graduates while -25 among those who haven't finished high school, -3 among whites but -52 among blacks and -2 among men while -19 among women.
Regionally, the index is worst in the Northeast (-22), compared with the South (-9), West (-9), and Midwest (-6). Interviews were completed Sunday, before hurricane Katrina smashed into the Gulf Coast.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Thirty-seven percent of Americans rate the economy as excellent or good; it was 39 percent last week. The highest was 80 percent on Jan. 16, 2000. The lowest was seven percent in late 1991 and early 1992.
PERSONAL FINANCES -- Fifty-nine percent say their own finances are excellent or good; it was 61 percent last week. The best was 70 percent on Aug. 30, 1998, matched in January 2000. The worst was 42 percent on March 14, 1993
BUYING CLIMATE -- Thirty-six percent say it's an excellent or good time to buy things, unchanged from last week. The best was 57 percent on Jan. 16, 2000. The worst was 20 percent in fall 1990.
METHODOLOGY -- Interviews for the ABC News/Washington Post Consumer Comfort Index are reported in a four-week rolling average. This week's results are based on telephone interviews among a random national sample of 1,000 adults in the four weeks ending Aug. 28, 2005. The results have a three-point error margin. Field work by ICR-International Communications Research of Media, Pa.
The index is derived by subtracting the negative response to each index question from the positive response to that question. The three resulting numbers are added and divided by three. The index can range from +100 (everyone positive on all three measures) to -100 (all negative on all three measures). The survey began in December 1985.
The Washington Post replaced Money magazine as cosponsor of this index at the start of this year. The survey methodology remains the same.
