Consumers Ride A Tough Economy
Consumer confidence flat and low; completes worst quarter since start of '92.
Sept. 30, 2008— -- Consumer confidence was flat and low this week in advance of the busted federal plan to stabilize ailing financial institutions, completing its worst quarter since the start of 1992.
The ABC News Consumer Comfort Index stands at -41 on its scale of +100 to -100, steady for three weeks straight. That's far below its 22-year average, -10, and on pace for one of its worst years on record.
It's an unsettled environment: A separate ABC News/Washington Post poll found 88 percent concerned that Congress' rejection of the government plan could lead to a more severe downturn. But registered voters divided evenly on the plan itself, and despite the market turmoil 61 percent remained optimistic about their family's finances.
The public often doesn't react strongly to market dives, since most stockholders are buy-and-hold investors, often through stock funds. And another trend, more immediately felt by consumers, is better: gas prices have eased by 21 cents in the last two weeks.
Still, the CCI is low, and other economic news is troubling. The Labor Department reports jobless claims at a seven-year high, the pace of new home sales dropped to its lowest since 1991 and the banking industry continues to shudder. The situation remains fluid, moreover, and this week's CCI survey was completed Sunday, before Congress' rejected a stabilization package and the Dow responded with a nearly 778-point fall.
The CCI easily could turn down if views don't improve; it's based on a four-week rolling average, and the last few weeks have been stressed ones.
INDEX – The CCI is based on Americans' ratings of their finances, the national economy and the buying climate. Just 15 percent rate the national economy positively, down from 31 percent at the beginning of the year and an average of 39 percent in weekly polls since late 1985.
Forty-nine percent rate their personal finances positively – below 50 percent for 10 weeks straight, the longest such stretch since 1993. And just 24 percent rate the buying climate positively, 6 points over the all-time low hit twice last month.
