Confidence Weakens as Gas Prices Climb Higher

NEW YORK, March 30, 2005 -- -- Consumer confidence lost ground this week, falling under the weight of six-straight weeks of gasoline price increases. Until now, confidence had held remarkably steady against higher pump prices.

In the face of record high gas prices (in nominal terms), the ABC News/Washington Post Consumer Comfort Index is down four points from last week and six points from the start of the month. In the past six weeks, gas prices have jumped 25 cents; they now average $2.15 cents a gallon for regular unleaded.

The index now stands at -13 on its scale of +100 to -100, its worst level of the year and its worst since last summer on the heels of another spike in gasoline prices. Overall, the index is now below its long-term average, -9 in weekly polls since late 1985.

The index is based on Americans' ratings of the national economy, buying climate and personal finances. This week, 36 percent say the national economy is in excellent or good shape, 37 percent say it's an excellent or good time to make purchases and 58 percent rate the state of their personal finances positively.

TREND -- At -13, the CCI is the worst it's been since June 20, 2004, and about at its 2004 average, -11. The index has been much higher, peaking at +38 in January 2000, but also much lower, bottoming out at -50 in February 1992.

The CCI has decreased six points over the last three weeks, from -7 in early March to -13 this week. While the index has dropped among most geographic and demographic groups over this time period, the decrease has been most dramatic in the Midwest (down 18 points), Northeast (down 12) and among Republicans (down 13).

GROUPS -- As noted, not all groups have lost confidence equally as the overall index has declined six points over the past three weeks. However, the general pattern of confidence is stable, with the index higher in better-off groups: +29 among higher-income Americans while -54 among those with the lowest incomes, +1 among college graduates while -38 among those who haven't finished high school, -6 among whites but -51 among blacks and -4 among men while -20 among women.

The decline in Republican confidence over the past three weeks (down 13 points) and a more modest decline among Democrats (down seven) means that the partisan gap continues to ease. The Democrat-Republican differential is back to where it was prior to President Bush's second inaugural, after spiking upward over the subsequent two months.

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; it was 37 percent last week. The highest was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.

PERSONAL FINANCES -- Fifty-eight percent say their own finances are excellent or good; it was 60 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-seven percent say it's an excellent or good time to buy things; it was 39 percent last week. 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 March 27, 2005. The results have a three-point error margin. Field work was done 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 co-sponsor of this index at the start of this year. The survey methodology remains the same.

See previous analyses in our Poll Vault.