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Confidence Drops to a 22-Year Low

New low point caps a dramatic year-and-a-half free-fall.

ByABC News
November 17, 2008, 5:06 PM

Nov. 18, 2008— -- Consumer confidence dropped this week to its lowest in 22 years of weekly polls by ABC News, hammered by the global economic crisis and threatening a grim holiday season for the nation's retailers.

ABC's Consumer Comfort Index stands at -52 on its scale of +100 to -100, down 4 points in two weeks to eclipse its previous low, -51 as gasoline prices soared last spring. It last approached these levels in the aftermath of the 1990-91 recession.

Click here for PDF with analysis and data table.

The index's long-term average, by contrast, is -11.

The new low caps a dramatic year-and-a-half free-fall in consumer views, with the index dropping from +2 in March 2007 to today's -52, its steepest decline on record. In that time positive ratings of the national economy have plummeted from 47 percent to today's 7 percent, tying the all-time low set in late 1991 and early 1992.

Ratings of personal finances have dropped from 64 percent positive to 44 percent in that 20-month period, less than a majority for 17 weeks straight and now 2 points from the record low. In grim news for retailers, ratings of the buying climate have dived from 42 percent positive to today's 21 percent, 3 points from the low this August and October.

The culprit was gasoline prices when the index last set its record low in May; gas averaged $3.94 per gallon and was rising steeply. This week gas is down by 84 cents in four weeks to $2.07. But the struggling economy has blown that news aside.

EXPECTATIONS – A separate, forward-looking measure holds some slight hope: While just 16 percent say the economy's getting better, that's up from a scant 2 percent last month to its highest since February. And the 55 percent who say the economy still is getting worse has eased from a highly unusual spike, to 82 percent, as the financial crisis initially took hold.

With 93 percent saying the economy already is in bad shape – including 62 percent who say it's in "poor" condition – there's not much to celebrate in expectations.