Consumer confidence has dropped to within a point of its record low in 22 years of weekly polls, unaided by easing gasoline prices. Ratings of the buying climate set a new low, with just 18 percent of Americans calling it a good time to spend money.
The ABC News Consumer Comfort Index stands at -50 on its scale of +100 to -100, a whisker from its all-time low of -51 on May 25. The index had regained 10 points in June and early July, but then slid back the past three weeks.
The CCI, based on ratings of the national economy, buying climate and personal finances, last was this low in early 1992, on the heels of the 1990-91 recession. It's averaged -10 in weekly polls since late 1985, peaking at +38 in January 2000 – a far cry from its current dire condition.
While gas is down from its record high in mid-July, it still averages $3.81 a gallon, 37 percent higher than a year ago. And other economic factors are at play, including seven straight months of job losses, tight credit, a depressed housing market and rising inflation. Unemployment is its highest in four years, 5.7 percent.
Rising gas prices and worsening confidence are highly correlated, but there can be a lag in recovery. After gas prices peaked in 2007 and subsequently declined, confidence languished for another two months. There were similar patterns in 2005 and 2006 – and those were without the other negative factors at play today.
INDEX – This is the 18th straight week that fewer than a quarter of Americans have rated the buying climate positively, matching the record set during the 1990-91 recession; as noted, a record low 18 percent say it's a good time to buy things.
Only one in 10 rate the economy positively, 29 points below the long-term average and only 3 points from the all-time low in late 1991 and early 1992. It's been at or below 15 percent for 18 straight weeks, the longest run since 1992.
Fewer than half, 47 percent rate their personal finances positively, down 11 points this year and 10 points below the long-term average. Apart from this year, the last time fewer than half of Americans rated their personal finances positively was in late 1993.
TREND – After accelerating losses through 2007 the CCI began this year at -20 and kept speeding south. The index has averaged -39 so far this year, just under its year-long averages of -37 in 1991 and 1993 alike (it averaged -44 in 1992). And it's down 9 points in the last three weeks.
In its best year, 2000, the CCI averaged +29.
GROUPS – The index remains higher in better-off groups, but is still negative across the board: it's -16 among those with the highest incomes vs. -80 among those with the lowest incomes, -43 among people who've been to college vs. -63 among high-school dropouts and -47 among whites while -74 among blacks.
The index hit a record low among young adults (under 35) this week, -58. It also reached a new low, -48, among men, near its -52 among women. In better times the index generally is substantially higher among men than women.
Two weeks from the Democratic convention, partisan differences remain strong: The index is -26 among Republicans, -49 among independents and, at, -65, a point from its record low among Democrats.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Ten percent of Americans rate the economy as excellent or good, same as last week. The highest was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
PERSONAL FINANCES – Forty-seven percent say their own finances are excellent or good; it was 48 percent last week. The best was 70 percent, last reached in January 2000. The worst was 42 percent on March 14, 1993.
BUYING CLIMATE – A record-low 18 percent say it's an excellent or good time to buy things; it was 19 percent last week. The best was 57 percent on Jan. 16, 2000.
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 August 10, 2008. The results have a 3-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.