Dec. 22, 2009 -- It may not quite rate as a Christmas miracle, but consumer confidence approached the holiday on a high note this week, rising to match its best level of the year – including an advance in ratings of the buying climate to their best in 20 months.
In a sign of some hope for retailers, 30 percent of Americans now call it a good time to spend money, up 9 points since late October to the most since March 2008. Ratings of personal finance also are up. But views of the national economy pull confidence back down.
Overall, at -42 on its scale of +100 to -100, the ABC News Consumer Comfort Index is its best since May, up 5 points in two weeks, up 9 points from late October and 12 points better than the all-time low it set last January. But there are miles to go: The CCI remains far below its long-term average, -12, and on track for its worst year on average in 24 years of weekly polls.
Previous rally attempts this year have failed, underscoring the fragility of consumer sentiment.
INDEX – The index is based on views of the national economy, the buying climate and personal finances. While the latter two have improved, ratings of the economy remain persistently negative: Just 7 percent say it's in good shape overall, 31 points below the long-term average.
Half, by contrast, now say their own finances are in good shape, the most since May and up 7 points in five weeks. This measure is now just 7 points below average.
Ratings of the buying climate, similarly, are 7 points below average, and this is the first time they've reached 30 percent positive after a record 92-week stretch below that level.
In a separate ABC News/Washington Post poll last week, half of Americans said they think the economy has begun to recover, up from 44 percent in November. At the same time, nearly three-quarters in that group called it a weak recovery so far, and 86 percent overall said that as far as their own experience goes, the recession is not over.
TREND – The index broke through this week after a six-week holding pattern in a 2-point range. It saw -42 just once before this year, May 10. The next challenge is to inch above -40, something the CCI hasn't managed for a record 88 consecutive weeks.
The index has averaged -48 this year; its worse previous yearlong average was -44 in 1992. Those compare to a best of +29 across 2000, peaking at +38 one week that January.
GROUPS – The index, as usual, is higher among better-off Americans, but has been negative across the board for 43 weeks straight, the longest such run in data since 1990.
It's -10 among those with the highest incomes but -72 among those with the lowest, -34 among people who've attended college vs. -50 among high school dropouts (their best since June 2008), -34 among men while -49 among women and -39 among homeowners while -49 among renters.
Continuing last week's trend, there's an unusually narrow racial gap, with an index of -42 among whites vs. -43 among blacks. This gap has averaged just 8 points this year, compared with a long-term average of 28 points.
Partisan differences have essentially evaporated, with the CCI at -40 among Republicans, -43 among Democrats and independents alike; that's after a year in which the index has averaged just 18 points higher among Republicans, compared with 41 points last year and 32 points long-term. That's chiefly because Democrats, with Barack Obama in the White House, are more positive than their norm; Republicans, less so.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Seven percent of Americans rate the economy as excellent or good, the same as last week. The highest was 80 percent Jan. 16, 2000. The worst was 4 percent Feb. 8, 2009.
PERSONAL FINANCES – Half say their own finances are excellent or good; it was 47 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 – Thirty percent say it's an excellent or good time to buy things; it was 29 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 Dec. 20, 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.