POLL: Current Sentiment Up, Expectations Still Lag

Dec. 18, 2007 — -- Consumer confidence advanced sharply this week, buoyed by more positive ratings of personal finances even as expectations for the economy's direction remained on shaky ground.

The ABC News/Washington Post Consumer Comfort Index gained 6 points to -17 on its scale of +100 to -100; it's increased this much or more in a single week only eight times in the past 22 years. The CCI had declined for four straight weeks, then paused last week before this week's sharp advance.

Despite the spike, a separate monthly measure of economic expectations remains grim. Last month, 68 percent said the economy was getting worse, the most in 17 years. That's now backed down to 61 percent, but it's still unusually high.

While ratings of the buying climate remain soft, shoppers might be encouraged by discounting by anxious retailers this holiday season. Unemployment has stayed low, with the country adding 1.3 million jobs in the past year. And after a run-up this fall, gas prices have leveled in the last few weeks.

At the same time, in addition to expectations, other views remain troubled. In an ABC/Post poll last week, the economy overtook Iraq as the most-cited issue in the upcoming presidential election. Retailers report lackluster sales. And the Federal Reserve's quarter-point cut in interest rates fueled a rough week for the stock market.

INDEX – The CCI is based on Americans' ratings of their current finances, the national economy and the buying climate. Positive ratings of personal finances are up 5 points to 59 percent this week, a level last seen in mid-October, matching the 2007 average.

The other two measures remain lower: Thirty-three percent rate the national economy positively, still 6 points off its 2007 average. Thirty-two percent call it a good time to buy things, just 2 points from its low this year, two weeks ago.

EXPECTATIONS – As noted, economic pessimism remains in the doldrums. The 61 percent who say the economy is getting worse compares with an average of 39 percent in ABC/Post polls since 1981. Only 8 percent say things are improving.