POLL: Positive Personal Finances Boost Confidence

Sept. 25, 2007 — -- Consumer confidence improved this week, moving back near its long-term average a week after the Fed's surprise half-point cut in the federal funds rate. Improved ratings of personal finances led the way.

The ABC News/Washington Post Consumer Comfort Index advanced four points to -11 on its scale of +100 to -100. The index had fallen a record nine points in a single week last month; it's gradually recovered all that ground in the five weeks since.

The jump in confidence was fueled by improving views of personal finances: Sixty-one percent say theirs are in good shape, up seven points in the last two weeks -- matching the largest two-week increase in this measure in the CCI's 21-year history.

The federal funds rate cut by the Fed last week is the benchmark rate for many credit cards and home-equity loans and can be reflected in rates on other consumer loans as well. Wall Street rallied after the Fed eased the rate.

INDEX -- The ABC/Post index is based on Americans' ratings of the national economy, personal finances and the buying climate. Ratings of personal finances customarily are the strongest of the three, and, as noted, they've risen by seven points in two weeks just once previously, in April 1993. (They've risen four points in one week, as they did this week, nine times previously.)

Of the other ratings, this week 36 percent rate the economy positively and 37 percent call it a good time to buy things, each little changed in the past two weeks.

TREND -- At -11, the CCI is near both its 2007 average (-8) and its average since the start of this weekly survey in late 1985 (-9). While better than its recent -20, it's still 13 points off of its 2007 high, +2 on March 11.

The index peaked at +38 in January 2000 and bottomed at -50 in February 1992.

GROUPS -- As usual the CCI is higher in better-off groups. It's +30 among higher-income people while -56 among those with the lowest incomes, +3 among those who've been to college while -35 among high-school dropouts, -5 among whites but -48 among blacks and -2 among men versus -19 among women.