Expectations for the economy’s future turned optimistic this week for the first time in six years in ongoing ABC News polling, and current ratings of the national economy inched to their best since the economy fell into the ditch in October 2008.
While the results are encouraging, there are miles to go: Even as 33 percent of Americans say the economy’s getting better, nearly as many, 29 percent, say it’s still getting worse – hardly a rousing endorsement. Nonetheless, that +4 on the positive side is a first since January 2004.
And the trend’s good: “getting better” sentiment is up by 10 points since February, while “getting worse” is down by 7 points since January.
Additionally, while just 12 percent say the national economy’s in good shape, that’s the highest on this measure, however slightly, since Oct. 5, 2008.
Other economic measures have improved, with housing starts, retail sales and industrial production up in April. Unemployment, though, weighs heavily on consumer attitudes, and it was a crushing 9.9 percent last month.
ABC tracks current sentiment and economic expectations separately; the hopeful news is that expectations, the measure that’s now its best in six years, tend to correlate better with the end of downturns. And its +4 better-worse compares to a record -80 at its nadir in October ’08, when 82 percent said the economy was worsening, vs. 2 percent who saw improvement.
Negative economic views can have strong political repercussions, particularly endangering incumbents – making consumer sentiment worth watching for political as well as economic reasons with the midterm elections ahead.
On current sentiment, ABC’s Consumer Comfort Index stands at -44 on its scale of +100 to -100, up from -47 last week and -50 a month ago, though still not back to its 2010 high, -41 in January. The index, based on Americans’ ratings of their personal finances, the buying climate and the national economy, averaged -48 last year, its worst on record, and bottomed out at -54 in late 2008 and early 2009.
It’s light years from its long-term average, -13 in 24 years of weekly polling, much less its high, +38 in January 2000. Beyond the national economy rating, more than half of Americans still rate their own personal finances negatively and just one in four call it a good time to buy things. That’s been below a third for 131 weeks, since just before the recession began.
Summary by Andrew Rabinowitz. Click here for tables with this week’s CCI data.