Consumer confidence matched its recent high this week despite soaring gasoline prices and a generally negative view of the economy's future. Improved assessments of personal finances are a likely driver.
This week's ABC News/Washington Post Consumer Comfort Index stands at -7 on its scale of +100 to -100, as high as it's been since mid August. One of the three components of the CCI, rating personal finances, is also at a post-Katrina high.
The Bureau of Economic Analysis reports that personal incomes have risen steadily since August; that, plus the positive jobs climate, seem to be bucking up confidence in the face of rising gas prices (up another dime this week to reach a national average of $2.78 a gallon).
But this survey finds continued pessimism regarding the economy's direction. By more than a 2-1 margin, Americans believe the economy's getting worse rather than better, similar to what it was last month. "Getting worse" is nine points higher than the long-term average.
Overall, assessments of the economy's direction have been negative for more than two years; the last time economic optimists outnumbered pessimists was in January 2004, when a plurality of Americans thought the economy was holding steady.
Expectations and current sentiment often move in the same direction, but not always, which is why the ABC/Post poll measures them separately.
INDEX -- The weekly CCI is based on American's ratings of the national economy, the buying climate and, as noted, their personal finances. This week 41 percent rate the economy positively, 37 percent call it a good time to buy things and more, 61 percent, say their finances are in good shape. Only personal finances are now rated more highly than their long-term average in more than 20 years of weekly polls..
TREND -- The index has been as low as -13 so far in 2006, and it's currently at its high for the year, -7, matching its level three weeks ago. Its all-time high was +38 in January 2000; its all-time low, -50, in February 1992. It has averaged -10 this year, about the same as its -9 average since December 1985.
GROUPS -- As usual, the CCI is higher in better-off groups. It's +30 among higher-income Americans, while -51 among those with the lowest incomes, +4 among college graduates while -26 among those who haven't finished high school, -1 among whites but -48 among blacks, and +7 among men while -20 among women.
Regionally, the index is best in the West (+4) and much lower in the Northeast (-17) and the Midwest (-15); it's -3 in the South. Expectations are also best in the West, where 31 percent believe the nation's economy is getting better, compared with 19 percent in the South, 12 percent in the Northeast and 11 percent in the Midwest.
On both the CCI and assessments of the country's economic future, huge partisan splits remain. The CCI is +38 among Republicans (a 14-month high), but -23 among Independents and -32 among Democrats. Optimism is also much higher among Republicans (35 percent say the economy's getting better) than among Independents (11 percent) and Democrats (just 3 percent).
Here's a closer look at the three components of the ABC/Post CCI: