Confidence Flat and Low; Personal Finances Weak

Feb. 26, 2008 — -- Shaky assessments of personal finances and weakened sentiment in higher-income households are helping keep consumer confidence flat and low, at its lowest level in 14 years.

The ABC News Consumer Comfort Index stands at -37 on its scale of +100 to -100, steady for three weeks at its lowest since November 1993. The only glimmer of hope is that after a steep 14-point drop from late January to mid-February, it's flattened out.

Among other reasons for concern, the index this week is -8 among people with household incomes over $100,000, a new low in three years of tracking that income group and only the second time it's been in the negative zone. The previous time was two weeks ago.

There's other grim news on the economic front: Inflation today was reported as up 7.4 percent the last year, its fastest increase since 1981; and home values in major markets were reported down 9 percent, their biggest drop in 20 years.

INDEX — The ABC index is based on Americans' ratings of their current finances, the national economy and the buying climate. This week just 49 percent rated their finances positively, only the second time since 1993 it's dipped below half (the last was two weeks ago) and 7 points from the record low, 42 percent in March 1993.

Only a quarter call this a good time to buy things, about where it's been all February, down 6 points since the start of the year and 13 points below the long-term average since this weekly poll began in December 1985.

Fewer, 20 percent, rate the national economy positively, down 11 points this year and 20 points below its long-term average, 40 percent. Last week was its lowest since November 1993, 19 percent.

TREND — The CCI has been below -30 for four weeks, the longest stint that low since November 1993. And it's been in negative double-digits 29 weeks straight, its longest run that low in five years.

The index fell by a significant margin in four out of five weeks in January and February; it's fallen that far, that fast just once before, in September to October 1990.The index's average for 2008 so far is -30, well below its 2007 average, -11, and its long-term, 22-year average of -10. While 2008 has a long way to go, the last full year worse than the current average was -37 in 1993.