So much for a happy New Year: In the midst of its worst stretch on record, consumer confidence starts 2009 at its lowest calendar-year opening in 23 years of weekly polls. But there is a faint glimmer in the gloom: slightly better ratings of the buying climate.
The ABC News Consumer Comfort Index stands at -49 on its scale of +100 to -100, unchanged from last week and within sight of its record low, -54 on Dec. 1. It's been -48 or lower since mid-October and -40 or worse since April 20, both low-streak records.
Positive ratings of the national economy this week match their all-time low, 6 percent, set last week. However, ratings of the buying climate, while just 26 percent positive, are their best since March, coinciding with post-Christmas retail discounts and lower gas prices. That comports with a report Tuesday from the International Council of Shopping Centers saying sales got a little lift the last week of December – but remained dismal overall.
The overall view is still grim. The CCI racked up its second worst annual average in 2008 and its worst ever quarter, averaging -50, in Q4. Compare that to its lifetime average, -11 in weekly polls since late 1985, much less its high, +38 in January 2000.
There are good reasons: The U.S. economy officially went into recession in December 2007, the Dow finished 2008 down 35 percent, the economy's shed nearly two million jobs, unemployment is at a 15-year high, home values declined by 12 percent last year, and, though gas prices have eased, they averaged $3.25 in 2008, the highest annual average in federal data since 1991.
INDEX – The CCI is based on Americans' ratings of the economy, their personal finances and the buying climate. Positive ratings of the national economy suffered the most in 2008, falling by 25 points through the course of the year and averaging just 15 percent, 24 points below the long-term average.
Positive ratings of the economy have been in single digits for nine weeks, exceeded only by a 13-week run in early 1992.
Twenty-six percent rate the buying climate positively, creeping up from its low of 18 percent in mid-October. However that's still 12 points lower than the long-term average. Positive ratings of the buying climate averaged 23 percent last year, the worst on record.
Forty-five percent rate their personal finances positively, the same as last week and 12 points off the long-term average. Half or fewer have rated their finances positively for 24 straight weeks, the worst such run since 1992-93.
TREND – While the CCI hasn't advanced much from its low, at least it's not getting worse, as it did so often in 2008. Before last year the index's all-time low was -50 in February 1992. Last year it fell that low or lower 10 times, setting or matching record lows four times. It was -50 or below steadily from mid-November to mid-December.
As noted, the CCI averaged -50 in Q4 2008, the worst quarter on record (previously -47 in Q1 1992). For the entire year it was -42, 2 points better than its worst year on record, 1992. Its best yearlong average was +29 in 2000.