February 10, 2010
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Economic Outlook Sours
Most Since 1992 Say Economy's Worsening

Analysis
By Dalia Sussman

ABCNEWS.com

March 18 — With war approaching and gasoline prices soaring, economic pessimism climbed this month to its worst since 1992, with Americans by more than 5-1 saying the national economy is heading south.



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Fifty-two percent in this ABCNEWS/Money magazine poll say the economy's getting worse, up eight points this month and up 32 points from a year ago. Just 9 percent think it's improving, down 11 points from last month and down 38 points in the last year.

The largest shift occurred in the West, where people are now 20 points more likely to express pessimism about the economy's future than they were last month. The average price of gasoline in the West now exceeds $2, the most in the country, according to a weekly Energy Department survey. The national average is $1.73 for a gallon of regular unleaded, up 44 cents in the last year to the highest on record.

There's also a sharp difference in economic expectations between the sexes: Sixty-four percent of women think the economy's getting worse, up 13 points since last month. Far fewer men agree — 39 percent, up just three points.

 CURRENT CONFIDENCE — Those are expectations, which the ABC/Money poll measures once each month. Separately, on a weekly basis, the poll also measures views of current economic conditions, reported in the ABCNEWS/Money magazine Consumer Comfort Index. This week current views are stable near their nine-year low, with the index -26 on its scale of +100 to -100. It was -25 last week after falling four points.

Just 22 percent of Americans rate the current economy positively, the fewest since December 1993. Thirty-four percent say it's a good time to buy things. In a traditionally stronger gauge, 55 percent rate their own finances positively.

Consumer confidence in general, and the buying climate index in particular, have proven vulnerable in the past to rising gasoline prices. Their direction over the next few weeks bears close watching.

 TREND — The ABC/Money index dropped to a nine-year low of -27 in mid-January, then improved through February, reaching -19 three weeks ago. But it retreated again last weak, falling back to -25.

The index peaked at +38 in January 2000 and averaged +29 that year, its best on record; it bottomed out at -50 in February 1992 and averaged -44 that year, its worst ever. Last year, its worst since 1996, the index averaged -11.

 GROUPS — As usual, confidence is higher among better-off Americans. The index is 0 among people in higher-income households compared to -47 in the lowest, -17 among college graduates while -41 among high-school dropouts, -23 among whites but -44 among blacks and -14 among men while -37 among women.


ABCNEWS/Money Index
Today -26
Last week -25
2003 Low -27
2002 Average -11
2001 Average +4
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 -9

Here's a closer look at the three components of the ABCNEWS/Money index:

 NATIONAL ECONOMY — Twenty-two percent of Americans rate the nation's economy as excellent or good; it was 23 percent last week. The best was 80 percent on Jan. 16, 2000. The worst was 7 percent in late 1991 and early 1992.

 PERSONAL FINANCES — Fifty-five percent rate their own finances as excellent or good; it was 53 percent last week. The best was 70 percent, set Aug. 30, 1998, and last matched in January 2000. The worst was 42 percent on March 14, 1993.

 BUYING CLIMATE — Thirty-four percent say it's an excellent or good time to buy things they want and need; it was 36 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 20 percent in the autumn of 1990.

 METHODOLOGY — The ABCNEWS/Money magazine Consumer Comfort Index represents a rolling average based on telephone interviews with a random sample of about 1,000 adults nationwide each month. This week's results are based on 1,005 interviews in the month ending March 16 and have an error margin of plus or minus 3 percentage points. The expectations question was conducted among 503 respondents March 5-16; 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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