A tepid gain in retail sales doesn’t mean it’s happy time for consumer sentiment: most Americans remain glum about the economy’s condition and skeptical about its direction, with the ABC News Consumer Comfort Index mired deep in the dumps.
The CCI, based on views of the economy, buying climate and personal finances, stands at -47 on its scale of +100 to -100 this week, far below its 25-year average of -14. It hasn’t exceeded -40 since April 2008, not long after the great recession, now allegedly over, officially began.
Moreover, in a separate, monthly expectations measure, more Americans continue to say the economy’s getting worse, 31 percent, than say it’s improving, 24 percent. The gap between optimists and pessimists has eased from 16 points in September to 7 points now. But that’s thin gruel; a plurality, 43 percent, still say it’s simply staying the same – and for the vast majority, the same means bad.
The results throw a November chill on yesterday’s report by the Commerce Department of a greater-than expected 1.2 percent rise in retail sales last month. That depended largely on motor vehicle, car parts and gasoline sales; excluding these, retail sales were up 0.4 percent, still better than expected but hardly a boom. And discretionary spending still looks to be under pressure; in some sectors – appliances, furniture and department stores – sales were down.
Some consumer needs build up during a long period of clenched pocketbooks; spending to accommodate them is not the same as a recovery in confidence. Indeed in this week’s CCI only 25 percent say it’s a good time to spend money, tying the average since the recession began and just 7 points higher than the record low hit in October 2008.
In the remaining components of the CCI, produced for ABC News by Langer Research Associates, just 10 percent of Americans rate national economy positively, and 45 percent say their own finances are good – the latter fewer than a majority for 45 weeks straight, one week shy of the record set in 1991-92.
The CCI has correlated with retail sales at a significant .37 since its inception, with periods of greater and lesser congruity. The relationship has been especially strong lately: Since the recession began the two have correlated at a robust .63. (Detrended for time.)
Unemployment’s the bear, and the CCI among Americans who aren’t employed hit a 21-month low this week, -62, a whopping 37 points below the long-term average in available data since mid-1990. Among those working full time the index is higher but hardly robust, given the carry-on impacts of job insecurity – an index of -31 in this group, 26 points below average.
Among some of the most economically vulnerable Americans, those without a high-school education, the index is a particularly grim -77, a 12-month low and 37 points below the long-term average. Across the spectrum the CCI peaks at -10 among the highest-earning Americans, those with household incomes over $100,000 a year. But that’s still 23 points worse than average in this group, raising the question of whether even the better-off will have the oomph to bring retailers some holiday relief.
Click here for tables with this week’s CCI data.