Consumer confidence dropped this week to match its 2007 low, and pessimism about the economy's future spiked to its highest in a year -- both on cue with a new nominal record in the price of gasoline.
The ABC News/Washington Post Consumer Comfort Index fell four points to -7 on its scale of +100 to -100, matching the year's low it saw twice last month. And 55 percent now say the economy is getting worse -- an enormous 21 points higher than the level of pessimism before the current run-up in gas prices began.
It's hardly unexpected. The average price of a gallon of gasoline rose another nickel this week to $3.10 in the weekly U.S. Department of Energy survey, surpassing its previous high of $3.07 after Hurricane Katrina in September 2005.
The price of gasoline has significantly correlated with consumer confidence since January 2006 at .50. And gas has jumped by nearly a dollar a gallon in the past 15 weeks.
Confidence had been holding tough, apparently by other, positive economic factors, such as low unemployment and low inflation. This week that defense looks to have cracked.
INDEX -- The CCI is based on Americans' ratings of the current economy, the buying climate and their personal finances. (Expectations are measured in a separate question.) Two of those -- ratings of the buying climate (35 percent positive) and ratings of the national economy (41 percent positive) -- are their lowest in seven months.
Ratings of personal finances -- 64 percent positive -- are keeping the index afloat.
EXPECTATIONS -- Additionally, for the first time in nine months, a majority now says the economy is getting worse. That's up nine points from just last month, and up by 21 points from its level in January. Economic pessimists outnumber optimists by 41 points, the largest gap since May 2006.
Economic pessimism last reached a majority in summer 2006, not coincidentally during another spike in gas prices. It dropped sharply -- by 20 points from August 2006 to January 2007 -- but increased just as sharply as gas headed up again. Economic expectations and the price of gasoline have correlated this year at .88. (Zero signifies no correlation; 1 is a perfect match.)
Pessimism is now 16 points higher than its long-term average in polls since March 1981. By contrast, only 14 percent think the economy's improving, with the rest saying it's holding steady.
TREND -- The current-sentiment index moved in a generally positive direction early this year, to its March 11 high of +2. It then then sustained a very steep seven-point drop in mid-March and has trended downward since then.
This is the third time in six weeks the CCI's been at its 2007 low of -7. Its long-term average is -9, ranging from a low of -50 in February 1992 to a high of +38 in January 2000.
GROUPS -- As usual, confidence is higher among better-off Americans. The index is +31 among higher-income people while -46 among those with the lowest incomes, +6 among college graduates while -25 among high-school dropouts and -2 among whites but -43 among blacks. It's +8 among men compared with -20 among women.
Huge partisan differences remain: The CCI is +36 among Republicans, but -21 among independents and -26 among Democrats. The gap between Republicans and Democrats has been bigger than usual for the past four weeks. This week's 62-point difference compares to a long-term average of 32 points. It peaked at 90 points in July 2004.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Forty-one percent of Americans rate the economy as excellent or good; it was 44 percent last week. The highest was 80 percent on Jan. 16, 2000. The lowest was seven percent in late 1991 and early 1992.
PERSONAL FINANCES -- Sixty-four percent say their own finances are excellent or good; it was 64 percent last week. The best was 70 percent last reached in January 2000. The worst was 42 percent on March 14, 1993.
BUYING CLIMATE -- Thirty-five percent say it's an excellent or good time to buy things; it was 37 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 20 percent in fall 1990.
METHODOLOGY -- Interviews for the ABC News/Washington Post 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 May 13, 2007. The results have a three-point error margin. The expectations question was asked of 500 respondents May 2-13; that result has a 4.5-point margin of error. 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.