Consumer Confidence Falls Steeply
NEW YORK, Sept. 14, 2005 -- -- Consumer confidence fell steeply this week, especially in the South, extending a month-long decline that's pushed economic views to their glummest in more than a year.
Just 32 percent of Americans now rate the national economy positively, down 10 points since early August to the smallest number since April 2004. As few call it a good time to spend money, down six points in the last month to the fewest in two and a half years.
All told, the ABC News/Washington Post Consumer Comfort Index has lost a total of eight points since Hurricane Katrina made landfall two weeks ago. It's fallen this far in two weeks only 11 times previously in more than 1,000 weeks of ongoing polling.
Confidence nationally is now its lowest since June 2004. And in the South, where the index has fallen by 15 points since Katrina smashed ashore, it's the lowest since late 2003.
INDEX -- The ABC/Post CCI nationally stands now at -20 on its scale of +100 to -100, down five points this week alone and down 13 points in the last month. In addition to Katrina, confidence has suffered from higher gasoline prices; gas eased by 11 cents a gallon this week but remains within sight of its all-time high.
In a separate ABC/Post poll this week, two-thirds of Americans said gas prices were causing them financial hardship. And as noted, positive ratings of the buying climate, often sensitive to gas prices, are their lowest since February 2003.
Ratings of personal finances, the third gauge that makes up the ABC/Post CCI, are down by five points in the last three weeks. Fifty-six percent say their own finances are good, the fewest since this past May.
TREND -- At -20, the index sits well below its average this year, -12, and its long-term average of -9 since December 1985. It 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, most recently a month ago, and its previous low was -19, in early May.
GROUPS -- As noted, during the past four weeks the index has declined particularly in the South, dropping from +2 to -24 since Aug. 14. This decline started before the hurricane but has accelerated in Katrina's aftermath.
In addition to the South, the CCI is the worst it's been in at least a year -- and in some cases much longer -- among women, whites, those with at least high school diplomas, full-time workers and people who rent their homes.
As usual, the index is comparatively higher in better-off groups. It's +25 among higher-income Americans while -56 among those with the lowest incomes, -6 among college graduates while -43 among those who haven't finished high school, -15 among whites but -45 among blacks and -14 among men while -27 among women.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Thirty-two percent of Americans rate the economy as excellent or good; it was 34 percent last week and 41 percent three weeks ago. The highest was 80 percent on Jan. 16, 2000. The lowest was seven percent in late 1991 and early 1992.
PERSONAL FINANCES -- Fifty-six percent say their own finances are excellent or good; it was 58 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-two percent say it's an excellent or good time to buy things; last week it was 36 percent. The best was 57 percent on Jan. 16, 2000. The worst was 20 percent in fall 1990.
CORRECTION -- Because of a data processing error, the overall CCI was misreported at -14 last week rather than the correct -15, and the personal finances index was reported as +17 rather than the correct +16. This week's report reflects the corrected numbers.
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 Sept. 11, 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.
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