Consumer confidence is closing out 2004 precisely where it started the year, building back from a series of setbacks to beat its 2003 average easily -- delivering reasonably good cheer both to the nation's retailers and to the Bush administration.
The ABC News/Money magazine Consumer Comfort Index ends the year at -7 on its scale of +100 to -100, exactly matching its level last Jan. 4. It hasn't been a smooth ride: The index recovered not once but twice in 2004, after falling to -22 in March and -20 in June amid spiking fuel prices, a shaky job market and election-year partisanship.
Based on Americans' views of the national economy, the buying climate and their personal finances, the index today roughly matches its long-term average, -9 in weekly surveys since late 1985. It averaged -11 this year, compared with -19 in 2003 -- an election-year improvement that boosted President Bush's re-election campaign.
Confidence has been far better: The index averaged +24 or better in 1998, 1999 and 2000 alike. But it's also been much worse, averaging -44 in 1992 and -37 in 1991 and 1993. And its decent close to the year came at a crucial time for retailers in their busy season.
PARTISANS -- A striking feature this year has been far greater than usual political partisanship in economic assessments. The index today stands at +33 among Republicans but -37 among Democrats, a 70-point gap. That's about its average this year, compared with a far lower 21-point gap on average across the previous decade.
The combination of an election year and an ambiguous, neither hot-nor-cold economy is the likely reason. In 1992, there was broad agreement the economy was in sorry shape; in 1996, a broad sense it was on the mend; in 2000, agreement that it was strong. This year there's been more room for debate -- opening the door to the partisanship in economic sentiment that set 2004 apart.
GROUPS -- There are other substantial gaps in economic views. Income is a strong factor: The index is quite negative among people in households with less than $40,000 in annual income, and much higher among those in $50,000-plus families. Indeed it's in these better-off households that the index has performed best lately, standing now at 14 points above its 2004 average.
The index, at +50, is strikingly high particularly among people in $100,000-plus households, which may help explain the reported strong sales of high-end luxury goods this season.
There also are big differences by education, which is related to income; among blacks (index -40) and whites (-1) and by age, with confidence lower among older Americans.
INDEX -- In sum, 43 percent of Americans now rate the national economy positively, five points better than the 2004 average. Thirty-nine percent call it a good time to buy things, matching the average. And more, 58 percent, say their own finances are in good shape, about average.
Again, these have been both much better, and much worse. As many as 80 percent (January 2000) and as few as 7 percent (late 1991 and early 1992) have rated the economy positively. Ratings of the buying climate have ranged from 57 percent positive in January 2000 to 20 percent in fall 1990. And positive ratings of personal finances have gone from 70 percent in summer 1998 (and again in January 2000) to 42 percent in March 1993.
Here's a closer look at the three components of the ABC/Money index: