Consumer Confidence Pauses After Five-Week Fall
May 30, 2006— -- Consumer confidence paused this week after a steep five-week decline, possibly benefiting from more moderate gasoline prices. But it's still near its six-month low and well below its more than 20-year average in weekly ABC News/Washington Post surveys.
The ABC/Post Consumer Comfort Index stands at -17 on its scale of +100 to -100 after falling from -7 in mid April to -19 last week. This is the first time in six weeks the index has not lost ground; still, it's six points below its average so far this year and eight points below its average since this survey began in December 1985.
Recently, easing gas prices and strong personal incomes may be helping. Gas as of last week averaged $2.88 a gallon, down from $2.95 the week before. And the Commerce Department reported last week that personal income rose a healthy 0.5 percent in April.
INDEX -- The index is based on Americans' ratings of the national economy, the buying climate and their own finances. This week 34 percent rate the economy positively, six points below its long-term average, and 33 percent call it a good time to buy things, five points below average. As usual, more, 57 percent, say their own finances are in good shape, matching its career average.
Bush today nominated Henry Paulson as Treasury secretary, replacing John Snow, whose resignation came amid complaints that he hadn't successfully made the administration's case that the economy is in good shape. The data in this and other surveys show the challenge Paulson faces: Not only did 66 percent say the economy's hurting, but 60 percent in an ABC/Post poll two weeks ago said they disapprove of how President Bush is handling it. Just 38 percent approved, two points from Bush's career low last November.
TREND -- The CCI started the year at -8, dipped to -13 in February, rebounded to -7 in March and again in April, its 2006 high, but then plunged 12 points in five weeks as gas prices soared. Last week's -19 was its low for the year.
It's been far worse, bottoming out at -50 in February 1992 but also much better -- an all-time high of +38 in January 2000. As noted, it's averaged -11 so far this year, and -9 since December 1985.
GROUPS -- As usual, the CCI is higher in better-off groups. It's +30 among top-income Americans while -61 among those with the lowest incomes, -2 among college graduates while -52 among those who haven't finished high school, -11 among whites but -49 among blacks, and -8 among men while -26 among women.
Regionally, at -27, the index continues to be lowest in the Midwest, compared with -18 in the South, -15 in the Northeast and -8 in the West. It's still far higher among Republicans (+26) than among Independents (-25) or particularly among Democrats (-42).
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Thirty-four percent of Americans rate the economy as excellent or good; it 33 percent rated it so last week. The highest was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
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