Confidence at its Best Since Katrina

NEW YORK, Nov. 30, 2005 -- -- Consumer confidence rebounded this week to its best level since Hurricane Katrina, just in time for the holiday shopping season.

The ABC News/Washington Post Consumer Comfort Index stands at -15 on its scale of +100 to -100, up six points in the past month and eight points above its post-Katrina low on Sept. 18. Confidence is now its best since Sept. 4, the first week after Katrina made landfall.

While confidence still is below its long-term average, its recent gains may help retailers, many of whom rely heavily on the Christmas season that began last Friday. Some initial reports indicated a strong start to the shopping season; VISA said holiday spending on its network was up 17 percent so far over 2004.

Gasoline prices hammered confidence after Katrina but have moderated sharply since, dropping from $3.07 per gallon Sept. 5 to $2.15 this week -- down for the eighth week in a row. In an ABC News poll last week, Americans on average said they planned to spend $1,096 on holiday gifts, the first $1,000-plus estimate since the boom year 1999.

INDEX -- The weekly ABC/Post index is based on Americans' ratings of the current national economy, the buying climate, and their personal finances. This week 36 percent rate the economy positively, 36 percent call it a good time to buy things, and 56 percent say their personal finances are in good shape, each near its average for the year.

TREND -- At -15, the index is below its long-term average, -9 in weekly polls since December 1985, and far below its high, +38 in January 2000. But it's back very close to its 2005 average of -13, and it's been far worse, as low as -50 in February 1992 and an average of -44 in 1992 as a whole.

GROUPS -- As usual, confidence is stronger among better-off Americans. The index is +50 among higher-income people while -63 among those with the lowest incomes, +3 among college graduates while -59 among those who haven't finished high school, -10 among whites but -43 among blacks and -3 among men but -25 among women.

As has been the case all year, the index is far higher among Republicans (+32) than it is among independents (-23) and particularly among Democrats (-39).

Regionally index this week is best in the West (-9), compared with -18 in the Northeast and South and -12 in the Midwest.

Here's a closer look at the three components of the ABC/Post CCI:

NATIONAL ECONOMY -- Thirty-six percent of Americans rate the economy as excellent or good, unchanged from 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-six percent say their own finances are excellent or good; it was 55 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; it was 33 percent 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 Nov. 27, 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.