Consumer confidence is showing a faint pulse, inching up on the strength of improved sentiment about the buying climate.
The ABC News Consumer Comfort Index still is exceptionally low, -47 on its scale of +100 to -100. But it's climbed 5 points in three weeks to surpass -50, its dead zone, for the first time since mid-June.
Just 26 percent of Americans call it a good time to buy things, but that's up 4 points from last week, to a point from its 2009 high. At the same time just 9 percent say the national economy's in good shape overall – it's been in single digits all but two weeks this year – and fewer than half, 44 percent, rate their own finances positively.
The CCI's slight gain follows a better showing in the housing market last month; new home sales were reported today to have risen more quickly in June than in any month since 2000. But that's an increase from a low level; prices are down 17 percent from a year ago; and on another front, June unemployment hit 9.5 percent.
INDEX – Positive ratings of personal finances and the economy overall are 5 points from their all-time lows, reached in late June and early February, respectively. On the buying climate, positive ratings are 8 points from their record low in October.
At 44 percent positive, ratings of personal finances are well below the long-term average, 57 percent, in weekly polls since late 1985. Positive ratings of the buying climate are 11 points below average; of the national economy, a vast 29 points below.
TREND – The CCI has broken out of a five-week stretch at -50 or lower; it hit -53 on June 21, a point shy of the record low in January. It's averaged -49 this year, a dismal level; its long-term average is -12, its record high, +38.
Indeed the index is running below its worst annual average on record, -44 in 1992. It's been below -40 for a record 66 weeks straight and hasn't been positive since March 2007.
GROUPS – The index is higher as usual among better-off Americans, but negative across the board for the 22nd week straight, and all but two weeks this year.
It's -22 among those with the highest incomes but -57 among those with the lowest (matching the best since December), -39 among those who've attended college vs. -63 among high school dropouts, -40 among men while -54 among women, -44 among homeowners compared with -55 among renters, and -47 among whites vs. -48 among blacks. The last is far different from the usual 28-point racial gap.
Partisan differences remain, with the CCI at -36 among Republicans, compared with -51 among independents and -52 among Democrats. But the Republican-Democratic gap has been narrower than usual this year, averaging 21 points compared with 41 points last year and 32 points long-term.
In the past three weeks the index has improved most sharply in the Midwest and West, among Democrats and among people who rent rather than own their homes.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Nine percent of Americans rate the economy as excellent or good; it was 10 percent last week. The highest was 80 percent Jan. 16, 2000. The worst was 4 percent Feb. 8, 2009.
PERSONAL FINANCES – Forty-four percent say their own finances are excellent or good; it was 43 percent last week. The best was 70 percent, last reached in January 2000. The worst was 39 percent June 28 and 21.
BUYING CLIMATE – Twenty-six 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, last reached Oct. 19, 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 July 26, 2009. The results have a 3-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.