Financial Crisis Sours Consumers; Record Say Economy's Getting Worse

Oct. 14, 2008— -- Weeks of turmoil have pushed Americans to their grimmest economic outlook in 27 years of polling, with consumer confidence dropping within 3 points of its historic low.

The ABC News Consumer Confidence Index fell 5 points this week to -48 on its scale of +100 to -100. In a separate measure, a record high 82 percent say the economy is getting worse, an increase of 30 points from last month – the biggest month-to-month jump ever.

The CCI, measured in a four-week-average, dropped sharply after weeks of financial upheaval, with the stock market plunging 18 percent and Congress pushing through a $700 billion package for Wall Street. The Dow Jones average rebounded yesterday, gaining 936 points (11 percent), the largest one-day point gain in history.

Market fluctuations typically have had little direct relationship to consumer confidence; just over four in 10 Americans don't own stocks or stock funds; those who do are almost exclusively long-term, buy-and-hold investors, and many have resources to carry through a bear market. In a separate ABC News/Washington Post poll, half of stock owners said they've been hurt financially by the market's drop; fewer, 20 percent, say they've been hurt a great deal.

EXPECTATIONS – More broadly, though, the economic outlook has never been grimmer. As noted, a record 82 percent say the economy's worsening, the most in ABC News polls dating to March 1981. Just 2 percent are optimistic, matching the low set in July; 13 percent say it's staying the same – which for nearly everyone is not good.

INDEX – The CCI, which does not include expectations, is based on Americans' ratings of their current finances, the national economy and the buying climate. Just 9 percent rate the economy positively, the lowest since November 1992, 2 points from the all-time low set in late 1991 and early 1992 and down 5 points in the past week. It's down 22 points this year and 30 points off the long-term average in weekly CCI polls since late 1985.

Nineteen percent say it's a good time to buy things, down 12 points from the beginning of the year. Ratings of personal finances – usually the strongest of the three measures – stand at 50 percent positive for the second week in a row.