Consumer confidence backed away from its worst stretch ever this week, gaining ground but no better than its dreadful start to the year.
The ABC News Consumer Comfort Index stands at -49 on its scale of +100 to -100, up 4 points from last week and 5 points better than its record low of -54 on Jan. 25. Since the start of the year, confidence has spent three weeks at -49, the first two of the year and this one – and those were its best. Since mid-January, confidence has been on its worst streak in 23 years of weekly polls.
Of the three components of the CCI, 95 percent rate the economy as not good or poor (hovering within a point of that for two months), and 76 percent call it a bad time to spend money. Negative ratings of personal finances, 53 percent, have improved since late January to their best since early November.
Despite the reprieve in confidence, expectations for the future are not encouraging with nearly six in 10 saying the economy's getting worse. That number has improved since October, but still fewer than one in 10 are optimistic.
The slight boost in confidence comes as Barack Obama signs his economic stimulus bill into law today in Denver. The package focuses on job creation, which is timely: The Bureau of Labor Statistics reports that extended mass layoffs reached their highest levels in the fourth quarter of 2008 in 14 years of data. Unemployment, at 7.6 percent, is the highest in 16 years.
INDEX – Only 5 percent rate the economy positively, in the same range as last week's record low 4 percent. Positive ratings are 34 points below the long-term average and 10 points off last year's average – the second lowest annual mark on record. The economy has been positively rated by 5 percent or fewer for the last five weeks, and by fewer than one in 10 for 15 weeks, the worst such streak on record.
Twenty-four percent rate the buying climate positively, 14 points from the long-term average and just 6 points off the low set in October and August. Fewer than a third of Americans have said it's a good time to buy things for 66 weeks straight now – only a stretch from 1990-93 was longer at this level.
The third and strongest measure – of personal finances – finds 47 percent giving a positive rating. That is up 6 points since it bottomed out at 41 percent on Jan. 25 and the highest rating since Nov. 2. Despite the improvement, positive ratings are still 10 points off the long-term average. Its 30 weeks below a majority is surpassed by a 40-week run in 1992-93.
EXPECTATIONS – As noted, economic expectations continue to flounder. Eight percent think the economy's getting better, similar to last month's 6 percent. Positive expectations haven't seen double digits in three months since peaking at 16 percent in November, the highest since early 2007.
Fifty-eight percent say the economy's getting worse, about the same as last month – but down from an unusual 82 percent in October. Still, pessimism is well above the long-term average, 41 percent in polls since March 1981.
TREND – The start of 2009 has been brutal for consumer confidence, despite the slight relief this week. The index's average for the year so far is -51, 40 points below its long-term, 23-year average of -11, and 9 points below its 2008 average.