Consumer Confidence Matches Year Low

Aug. 29, 2006— -- Pushed by weakening ratings of the national economy, consumer confidence fell sharply this week to match its 2006 low.

The ABC News/Washington Post Consumer Comfort Index dropped five points to -19 on its scale of +100 to -100, tying the 2006 low it set in mid-May. That's an unusually steep one-week fall; the index has lost five or more points in a single week just 26 times in the last 20 years. It's now 10 points below its long-term average.

The CCI is based on Americans' ratings of the national economy, the buying climate and their personal finances. Leading this week's fall are sagging ratings of the economy: Just 33 percent of Americans now say the economy's in good shape, down four points from last week and seven points from early July.

Four consecutive months of weak job growth may be a factor. This month's employment report, out Friday, bears watching.

INDEX -- In the CCI's other components, 32 percent call it a good time to buy things, essentially unchanged from last week but down seven points from early July. Ratings of personal finances have been more stable; they're at 57 percent this week, matching their long-term average.

TREND -- At -19, the CCI is seven points below its average so far this year, and, as noted, 10 points below its average in weekly polls since December 1985. It had been falling this summer amid rising gas prices, but leveled off last week as prices began to ease.

The CCI has been as high as -7 in 2006, first in March and then again in April. Its all-time high was +38 in January 2000; its record low, -50 in February 1992.

GROUPS -- As usual, the index is higher in better-off groups. It's +31 among higher-income Americans while -66 among those with the lowest incomes, -9 among college graduates while -33 among those who haven't finished high school, -12 among whites but -54 among blacks and -3 among men while -32 among women.

The index continues to be best in the West, at -1, compared with -17 in the South, -26 in the Midwest and -30 in the Northeast. The index is also much better among Republicans (+23), than it is among independents (-25) or, especially, Democrats (-35).

Since mid-July, the index has lost ground particularly among women, younger Americans, blacks and people living in the Northeast and Midwest.

Here's a closer look at the three components of the ABC/Post CCI:

NATIONAL ECONOMY -- Thirty-three percent of Americans rate the economy as excellent or good; it was 37 percent last week. The highest percentage of Americans rating the economy as excellent or good was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.