Confidence Ties its Record Low
Fifty-Nine Percent of Americans Say Their Personal Finances Are in Bad Shape
Analysis by Patrick Moynihan
Jan. 27, 2009
Consumer confidence has matched its worst in 23 years of weekly polls, with a record number of Americans saying their personal finances are in bad shape – and nearly all rating the national economy negatively.
Fifty-nine percent say their own finances are not good, the most in ongoing ABC News polling since late 1985. Ninety-five percent say the economy's in bad shape, tying last week's record. And 77 percent call it a bad time to buy things, 5 points from its worst.
ABC's Consumer Comfort Index, based on these gauges, stands at -54 on its scale of +100 to -100, down 5 points in two weeks to tie its worst ever, set Dec. 1. That compares to a long-term average of -11 and a high of +38 in early 2000.
The CCI hit -50 or lower just once from late 1985 through 2007 (in 1992) – but then did so 10 times last year, and twice in the first four weeks this year.
Confidence returned to its low as some of the nation's most prominent companies announced major layoffs: Caterpillar, Pfizer, Sprint Nextel, Home Depot, Texas Instruments and General Motors said Monday they'll shed up to 60,000 jobs. Separately the latest Case-Shiller Home Price Index dropped a record 18.2 percent in 20 metro areas measured.
INDEX – The CCI finds that just 41 percent of Americans now rate their own finances positively, a record low, 16 points off the long-term average and below a majority for 27 straight weeks, the longest such streak since a 40-week run in 1992-93.
Just 5 percent rate the economy positively, tying the low set last week and a huge 34 points below the long-term average. It's been in single digits for 12 straight weeks, a week shy of the record set in 1992.
In the third measure, just 23 percent rate the buying climate positively, 15 points off the long-term average but still 5 points above its record low in October and August.
TREND – Annual averages for the index sum up its story – from -11 on average in 2007 it plummeted to an average -42 in 2008, with deterioration in each of the last seven quarters. It started this year flat at -49 before dropping to -53 last week, its first significant one-week move since mid-October.
GROUPS – The CCI is higher as usual among better-off groups, but negative across the board for the 31st straight week. It's -12 among those with the highest incomes compared with -78 among those with the lowest, -46 among those who've attended college vs. -67 among high school dropouts, -49 among men (matching their low) while -57 among women (2 points from their low), -49 among homeowners (a new low) vs. -67 among renters and -49 among whites (a point from their low set last week) vs. -66 among blacks.
Partisan differences remain: The index is -37 among Republicans vs. -65 among Democrats, and -50 among independents.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Five percent of Americans rate the economy as excellent or good, matching the record low set last week. The highest was 80 percent Jan. 16, 2000.
PERSONAL FINANCES – Forty-one percent say their own finances are excellent or good, a new low; it was 42 percent last week. The best was 70 percent, last reached in January 2000.
BUYING CLIMATE – Twenty-three percent say it's an excellent or good time to buy things; it was 24 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 18 percent Oct. 19, Aug. 10 and Aug. 24, 2008.
METHODOLOGY – Interviews for the ABC News 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 Jan. 25, 2009. The results have a 3-point error margin. 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.