Confidence Holds Steady; Pessimism Remains High

June 19, 2007 — -- The precipitous decline of consumer confidence in May and June has flattened, with the ABC News/Washington Post Consumer Comfort Index essentially unchanged again this week. But it remains near its 2007 low, with pessimism running high.

The CCI fell by 12 points in the month through June 3 as gas prices soared; it's now leveled as gas has eased back, from a high of an average $3.22 to $3.01 in this week's U.S. Department of Energy survey. Gas prices are correlating highly with economic sentiment.

The ABC/Post index stands at -14 on its scale of +100 to -100, one point from the 2007 low two weeks ago. In a separate measurement of expectations, 52 percent say the economy is getting worse -- about the same as last month, and much higher than the level of pessimism before the run-up in gas prices this spring.

INDEX -- The CCI is based on Americans' ratings of the current economy, the buying climate and their personal finances. Ratings of personal finances are 57 percent positive for the third consecutive week, matching its low for the year and its long-term average since this poll began in late 1985.

Thirty-eight percent rate the national economy positively while 34 percent say the buying climate is good, both essentially unchanged this week.

EXPECTATIONS -- In terms of expectations, for the second month in a row -- and the only times since last fall -- a majority says the economy is getting worse. That's up six points from April and up 18 points from January.

As in May, economic pessimists outnumber optimists by 41 points, the largest gap since May 2006. Only 11 percent say the economy is getting better, the fewest since October 2005. Before May, economic pessimism last reached a majority in summer 2006, during another spike in gas prices.

Pessimism is now 13 points higher than its long-term average in polls since March 1981 and 18 points higher than its 2007 low.

TREND -- Overall it's been a tough spring for consumer confidence. The CCI is down 11 points from -3 six weeks ago, hovering near its 2007 low of -15 on June 3. It's nine points worse than its 2007 average, -5, and far from its 2007 high, +2 on March 11.