Consumer confidence slid to a four-year low this week, as positive ratings of the buying climate remain at their worst level in 14 years.
The ABC News Consumer Comfort Index stands at -27 on its scale of +100 to -100, down four points from last week, and seven points below where it began the year. This is the second four-point drop this month, continuing the CCI's now six-month negative double-digit streak, its longest since 2002-03.
Only 28 percent call it a good time to buy things, the fewest since August 1993. Faltering consumer confidence has not gone unnoticed by President George W. Bush and Congress. In his final State of the Union speech last night, Bush acknowledged that the economy is undergoing a period of uncertainty and offered a stimulus plan to reverse the economic slump. It remains to be seen whether such a plan, or the Fed's recent cut of three-quarters of a point in its benchmark federal funds rate, can reverse the downward trend.
INDEX – The ABC News CCI is based on Americans' ratings of their current finances, the national economy and the buying climate.
As noted, 28 percent rate the buying climate positively, down from 37 percent in September and 15 points below the 2007 high of 43 percent reached in late March. The figure is 10 points below the average for weekly polls since December 1985.
Twenty-seven percent rate the economy positively, a proportion matching last year's low and 13 points below the long-term average. This rating is down 10 points since late September, and 21 points since reaching the 2007 high of 48 percent in mid-February.
Positive ratings of personal finances, still the strongest of the three measures, are at 54 percent – the lowest in seven weeks and a point off the 2007 low of 53 percent reached in late August.
TREND – At -27, the CCI is at its lowest point since March 2003, surpassing last year's low and continuing the downward trend of 2007. The CCI averaged -2 in the first quarter of 2007, -9 in the second, -12 in the third and -18 in the fourth quarter.
Four weeks into 2008, the index's yearly average is -24, well below both its 2007 average, -11, and its 22-year average of -9. Still, 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.
While far below its record high, +38 in January 2000, the index also is much better than its record low, -50 in February 1992.
GROUPS – As usual the CCI is split along demographic lines. It's +17 among higher-income people, versus -53 among those with the lowest incomes; -14 among those who've been to college, versus -45 among high-school dropouts; -25 among whites, versus -40 among blacks; and -19 among men, versus -35 among women.
Partisan differences remain: The index is +5 among Republicans, but -38 among independents and -41 among Democrats.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Twenty-seven percent of Americans rate the economy as excellent or good; the figure was 30 percent last week. The highest was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.