Oct. 6, 2009 -- Americans' ratings of the economy inched this week to their best in a year – but with consumer confidence running its worst annual average in 23 years of polls, less bad is a far way from good.
Eighty-nine percent of Americans continue to say the economy's in rough shape, 73 percent call it a bad time to spend money and 56 percent say their own finances are hurting, all well above their long-term averages. The ABC News Consumer Comfort Index, based on these gauges, stands at -45 on its scale of +100 to -100, vs. an average of -12 in weekly polling since late 1985.
The CCI is up 4 points in four weeks to its best since late August, and better than its lowest, -54 in January. Its best this year was -42 on May 10; its annual average, -48, is on track for its worst year to date.
The cause is starkly evident in the latest jobs data: unemployment is 9.8 percent, the highest since June 1983; including discouraged workers it's 17 percent, up from 11.2 percent a year ago to the highest in available data to 1994. Regardless of other indicators, one in six out of work could portend a long haul for consumer confidence.
INDEX – Of the three components of the index, positive ratings of the national economy have been the weakest by far, averaging in the single digits since October, well below the long-term average of 38 percent.
Nonetheless there are glimmers: Poor as they are, positive ratings of the economy, at 11 percent, are their best in the last year, and have cracked double digits for three weeks straight, a first since last fall. They are, though, 27 points below average.
Twenty-seven percent say it's a good time to buy things, matching the year's best and above a quarter for three weeks – the best such run since March 2008. Still, positive ratings of the buying climate are 10 points below average, and have been below 30 percent for a record 82 weeks.
Ratings of personal finances, typically the strongest of the three measures, are at 44 percent positive, below a majority for 21 straight weeks and 13 points below their long-term average.
TREND – The index has spent the last 11 weeks above -50, its best such run since hitting -51 in May 2008 – which, at the time, was only the second instance the CCI hit -50 or worse. It's been there 20 times since.
Still the CCI is in historically bleak territory; it's been below -40 for a record 76 weeks and hasn't been positive since March 2007. It's 33 points below its long-term average and light years from its best yearlong average, +29 in 2000, and all-time best, +38 in January 2000.
GROUPS – The index is higher as usual among better-off Americans, but has been negative across the board for 32 weeks straight and all but two weeks this year. The current stretch is second only to two such runs of 33 weeks, one that ended in February and the other in 1991-92.
The CCI is -3 among people with the highest incomes but -74 among those with the lowest, -33 among those who've attended college vs. -78 among high school dropouts (3 points from the low set two weeks ago), -40 among men while -49 among women, -35 among homeowners (matching the best since last July) compared with -69 among renters (the worst since July), and -44 among whites vs. -59 among blacks. This week's 15-point racial gap again is narrower than usual – it's averaged 28 points long-term.
Partisan differences remain, with the index at -32 among Republicans (matching the best since May) vs. -51 among Democrats and -50 among independents (the worst since July). That 19-point Republican-Democratic gap is much smaller than last year's average difference, 41 points, and the long-term difference in data since 1990, 32 points.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Eleven percent of Americans rate the economy as excellent or good; it was 10 percent last week. The highest was 80 percent Jan. 16, 2000. The worst was 4 percent Feb. 8, 2009.
PERSONAL FINANCES – Forty-four percent say their own finances are excellent or good; it was 45 percent last week. The best was 70 percent, last reached in January 2000. The worst was 39 percent June 28 and 21, 2009.
BUYING CLIMATE – Twenty-seven percent say it's an excellent or good time to buy things; it was 26 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 18 percent, last reached Oct. 19, 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 Oct. 4, 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.
ERRATA – A software problem at ICR created errors in crosstabulated results by income group and marital status in data Aug. 30 to Oct. 18. The CCI overall and in other crosstabulations was not affected. This report has been updated with corrected results by income group and marital status.