Confidence Drops Sharply, Erasing a Positive Trend
Just 9 percent of Americans rate the economy positively.
Jan. 12, 2010 — -- Consumer confidence this week sustained one of its steepest one-week drops in the last quarter century, following last week's troubling jobs report with an all-hands retreat from what had been a tentative positive trend in consumer attitudes.
The ABC News Consumer Comfort Index dropped 6 points to -47 on its scale of +100 to -100, a highly unusual shift. It's fallen this far or farther in a single week only 13 times in 24 years – more than 1,250 weeks – of ongoing polling.
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The fall washed away an advance in which the CCI had improved to its best in 16 months. It's vastly worse than its average, -12 in weekly polls since late 1985, much less its highs at the start of the past decade – including its record high, +38, 10 years ago this week.
Two of the index's three components – ratings of personal finances and the buying climate – matched their largest-ever one-week drops, down by 5 and 4 points, respectively. The third measure, on the national economy, simply has less room to move; 91 percent say it's bad.
The drop follows last Friday's report from the Bureau of Labor Statistics indicating a loss of 85,000 jobs in December, defying many economists' expectations of growth. Unemployment remains at 10 percent – with four in 10 of the jobless out of work for more than 27 weeks.
The arrival of Christmas shopping bills may also have contributed to the fall. While this has not been a consistent issue in past years, consumers may now be especially vulnerable to sticker shock given their low confidence overall.
INDEX – Today 54 percent of Americans rate their personal finances negatively, up 5 points from last week (as noted, tying the record one-week spike) half or more for 74 of the last 77 weeks, a record by far. It's 11 points worse than its long-term average.
Seventy-six percent call it a bad time to spend money, also matching its largest one-week rise and 13 points worse than average. And, as noted, the third component of the CCI is the worst by far: Only 9 percent positively rate the economy, 29 points below average.
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