Consumer confidence lost its mild forward momentum this week, with Americans' ratings of their own finances now their weakest since July. Nonetheless relatively few think the economy's getting even worse – a dramatic change from the record pessimism a year ago.
Peering into the abyss on Oct. 13, 2008, a remarkable 82 percent of Americans said the economy was getting worse – a record in ABC News polls back to 1981. Today, 32 percent say so, almost matching the fewest in the last five years, 31 percent in August.
The fact that fewer say the economy's worsening, of course, is at least in part a function of how bad it is now – and for vast numbers, it's plenty bad. Just 11 percent rate the economy positively, 25 percent call it a good time to spend money and 42 percent say their own finances are O.K., all far below their averages in 23 years of weekly polls. ABC's Consumer Comfort Index, based on these, stands at -48 on its scale of -100 to +100, compared with a long-term average of –12.
The index had climbed 4 points in four weeks only to return this week to its early September level, matching its yearlong average. Ratings of personal finances are down 6 points since late August.
Federal Reserve Chairman Ben Bernanke last week indicated interest rates will stay low for the time being. But that alone's unlikely to improve consumer sentiments, with unemployment at a 26-year high 9.8 percent.
CURRENT INDEX – As noted, 42 percent of Americans now rate their own finances positively, 15 points below the long-term average and just 3 points shy of the record low in late June. It's been below a majority for 22 weeks straight and all but two weeks this year.
Far fewer, 25 percent, say it's a good time to buy things, 12 points below average and below 30 percent for a record 83 weeks. And positive ratings of the national economy are a whopping 27 points below average.
BETTER/WORSE – In a separate, forward-looking measure of expectations, 32 percent say the economy's still getting worse – a painful thought given how bad it is, but nonetheless down 11 points from last month. It's been bouncy this year.
An additional 28 percent think the economy's improving, the most since spring; 38 percent see it as staying the same, up 7 points from last month and essentially matching the long-term average.
INDEX TREND – Since reaching the year's best, -42 on May 10, the index hasn't been better than -45 – a mark it's reached four times, including last week, only to retreat. But while it's circled in a narrow 4-point range the past 12 weeks, this is its longest run above -50 since May 2008.
Historically, though, the CCI remains in remarkably bad shape; it's been below -40 for a record 77 weeks and hasn't been positive since March 2007. It's 36 points below its long-term average and only 6 points from the record low, -54 on Jan. 25.
Its best yearlong average was +29 in 2000; its best week, +38 in January 2000.
GROUPS – The index is higher as usual among better-off Americans, but has been negative across the board for 33 weeks straight, matching the longest such run in data since 1990.
The CCI is -7 among people with the highest incomes but -79 among those with the lowest, -36 among those who've attended college vs. -81 among high school dropouts (matching the low), -42 among men while -53 among women, -38 among homeowners compared with -71 among renters (the worst since July), and -47 among whites vs. -59 among blacks. This week's 12-point racial gap again is narrower than usual – it's averaged 28 points long-term.
Partisan differences remain, with the index at -34 among Republicans vs. -52 among Democrats and -55 among independents (the worst since July). That 18-point Republican-Democratic gap is much smaller than last year's average difference, 41 points, and the long-term difference in data since 1990, 32 points.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Eleven percent of Americans rate the economy as excellent or good, the same as last week. The highest was 80 percent Jan. 16, 2000. The worst was 4 percent Feb. 8, 2009.
PERSONAL FINANCES – Forty-two percent say their own finances are excellent or good; it was 44 percent last week. The best was 70 percent, last reached in January 2000. The worst was 39 percent June 28 and 21, 2009.
BUYING CLIMATE – Twenty-five percent say it's an excellent or good time to buy things; it was 27 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 18 percent, last reached Oct. 19, 2008.
METHODOLOGY – Interviews for the ABC News 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 Oct. 11, 2009. The results have a 3-point error margin. The expectations question was asked of 500 respondents Sept. 30-Oct. 11, 2009; that result has a 4.5-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.
ERRATA – A software problem at ICR created errors in crosstabulated results by income group and marital status in data Aug. 30 to Oct. 18. The CCI overall and in other crosstabulations was not affected. This report has been updated with corrected results by income group and marital status.