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.
At -49, the index is below -50 for the first time in five weeks, but has been remarkably consistent of late: It's hovered between -48 and -54 for 19 weeks straight since mid-October, the longest such slump on record. It's been below -40 for 43 consecutive weeks, another record.
The CCI is far below its record high, +38 in January 2000, while just 5 points off its worst reached three weeks ago.
GROUPS – The CCI is higher as usual among better-off groups, but it is still negative for most Americans. The index had been negative across the board for the 33 straight weeks – matching the previous record in 18 years of data, set twice during 1991-92. This week, however, the highest income bracket is positive at +5, the first time it's been positive since June, vs. -80 among those with the lowest incomes.
It's -40 among those who've attended college (their best since Nov. 9) vs. -63 among high school dropouts, -45 among men while -51 among women (their best since Oct. 5), -43 among homeowners vs. -65 among renters and -46 among whites vs. -58 among blacks.
Partisan differences remain: The index is -28 among Republicans (their best since Nov. 16) vs. -59 among Democrats and -51 among independents.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Five percent of Americans rate the economy as excellent or good; it was 4 percent last week, the record low. The highest was 80 percent Jan. 16, 2000.
PERSONAL FINANCES – Forty-seven percent say their own finances are excellent or good; it was 44 percent last week. The best was 70 percent, last reached in January 2000. The worst was 41 percent Jan. 25.
BUYING CLIMATE – Twenty-four percent say it's an excellent or good time to buy things; it was 22 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 18 percent Oct. 19, Aug. 10 and Aug. 24, 2008.
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 Feb. 15, 2009. The results have a 3-point error margin. The expectations question was asked of 500 respondents Feb. 4-15, 2009; that result has a 4.5-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.