POLL: Buying Climate at 14-Year Low as Consumer Confidence Labors
Only 29 percent call this a good time to buy things, the lowest since 1993.
Jan. 22, 2008 — -- Americans' ratings of the buying climate hit their lowest in 14 years this week, with consumer confidence overall extending its long slump in negative double digits.
The ABC News Consumer Comfort Index stands at -23 on its scale of +100 to -100, essentially flat after matching its 2007 low last week. It's the CCI's 24th consecutive week in negative double digits, its longest slump since 2002-03.
It's a chilling sign given the role of consumer spending in the economy, only 29 percent call this a good time to buy things they want and need, the lowest level since Oct. 24, 1993. That echoes last week's Federal Reserve Beige Book, which underlined disappointing year-end retail sales as well as a weak housing market and limited employment gains.
The stock market has hardly helped, down 1,293 points this year, 507 just last week and down 128 points today, although today's result was better than expected after the rout in foreign markets, which led the Fed to order an unusual between-meetings cut of three-quarters of a point in its benchmark federal funds rate.
At -23, the index is far below its long-term average, -9 in weekly polls since late 1985, and down from 6 points since the middle of last month. It fell more steeply at the start of the last two recessions -- down 16 points from +20 to +4 in February and March 2001, and down 13 points from -14 to -27 in June and July 1990.
Interviews for this week's survey were completed Sunday, before the big drop in overseas markets. While the markets bear watching, big drops in share prices historically have not had a deep or sustained impact on consumer confidence, likely because Americans who own stocks tend by far to be buy-and-hold investors, not traders.
INDEX – The ABC News CCI is based on Americans' ratings of their current finances, the national economy and the buying climate. All three held essentially steady this week, with the latter two particularly low.
As noted, 29 percent rate the buying climate positively, down from 37 percent in September and a 2007 high of 43 percent last March, and 9 points below its average in weekly polls since December 1985. About as many, 30 percent, rate the economy positively, 10 points below its long-term average.
