The ABCNEWS/Money Consumer Comfort Index stands at +5 on its scale of -100 to +100. Last week it was at +7, up two points from the preceding week.
(ABCNEWS.com)
Poll: Sentiment Teeters
Fed Reserve Acts to Bolster Confidence
By Dalia Sussman
N E W Y O R K, Aug. 22
— Bleaker economic views among Americans provided the backdrop to Tuesday's decision by the Federal Reserve to cut a key short-term interest rate.
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Public ratings of the national economy are their worst since April 1997.
Fifty-two percent of Americans now say the economy's in bad shape, a number that's soared by 23 points this year and by 32 points since January 2000. It has been much worse, though: In late 1991 a near-unanimous 93 percent rated the economy negatively.
Indeed consumer confidence, like the economy itself, has seemed perched lately between safety and the brink. In an effort to keep the economy from slipping into a recession, Fed policymakers announced their seventh interest-rate cut this year.
Low interest rates, and low inflation, do look to be shoring confidence up. Ratings of the buying climate and personal finances have held relatively steady, partly counteracting concern about economic contraction. Without these, the slump in confidence would look more like a free-fall.
This week 44 percent call it a good time to buy things, down just three points from the start of the year. Sixty-six percent rate their own finances positively, right where it was at the start of the year and just four points off its record high.
Positive Ratings of the Economy
8/19/01
1/7/01
Record high
15-year average
National Economy
48%
71%
80%
42%
Buying Climate
44%
47%
57%
38%
Personal Finances
66%
66%
70%
57%
The ABCNEWS/Money Magazine Consumer Comfort Index, based on these three gauges, now stands at +5, far below levels seen from the late 1990s through last year. Yet it's still above its average of -8, and much better than its record low of -50, in February 1992.
The index fell seven points in one week in January (tying the one-week record), six points in one week in February, five points in one week in March and another five points in one week in April. It then lay in a slump through mid-July, hovering between +1 and +4. The index inched up a month ago and has been above +4 ever since.
ABCNEWS/Money Index
Today
+ 5
May 27, 2001
+ 1
Jan.
7, 2001
+23
Jan.
16, 2000
+38
Record high
2000
average
+29
Best full year
1992
average
-
44 Worst full year
Feb. 9, 1992
- 50 Record low
Average since 12/85
- 8
A Closer Look
As usual, confidence is higher among better-off Americans. The index is +34 in higher-income households compared to -43 in the lowest, +18 among college graduates while -32 among high-school dropouts, +9 among whites but -22 among blacks and +11 among men while 0 among women.
Here's a closer look at the three components of the ABCNEWS/Money index:
NATIONAL ECONOMY — Forty-eight percent of Americans rate the nation's economy as excellent or good, down one point from last week. The best was 80 percent Jan. 16, 2000. The worst was seven percent in late 1991 and early 1992.
PERSONAL FINANCES — Sixty-six percent rate their own finances as excellent or good, the same as last week. The best was 70 percent, set Aug. 30, 1998 and last matched in January 2000. The worst rating was 42 percent on March 14, 1993.
BUYING CLIMATE — Forty-four percent say it's an excellent or good time to buy things they want and need, down one point from last week. The best was 57 percent Jan. 16, 2000. The worst was 20 percent in fall 1990.
Methodology
The ABCNEWS/Money magazine Consumer Comfort Index represents a rolling average based on telephone interviews with about 1,000 adults nationwide each month. This week's results are based on 1,018 interviews in the month ending Aug. 19 and have an error margin of plus or minus 3 percentage points. The question on expectations was conducted among 509 respondents Aug. 1-12; that result has a 4.5-point error margin. Field work was conducted by ICR-International Communications Research of Media, Pa.
The ABCNEWS/Money index is derived as follows: The negative response to each index question is subtracted from the positive response to that question. The three resulting numbers are then 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.
Previous ABCNEWS polls can be found in our Poll Vault.
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