March 24, 2009 -- Improved expectations for the economy have yet to impact ratings of current conditions, which are stuck in the weeds.
The ABC News Consumer Comfort Index, based on current conditions, stands at -49 on its scale of +100 to -100, locked in a narrow 2-point range since mid-February with few signs of real improvement. That is despite a decrease in pessimism for the future – measured separately last week – in which 48 percent said the economy is getting worse, 10 points lower than last month and 34 points lower than its worst in October.
Among the three components of the CCI, ratings of personal finances have stalled confidence, increasing from 51 percent negative in late February to 55 percent today. But negative ratings of the economy and the buying climate, far worse than personal finances at 92 and 76 percent respectively, have been steady.
Two other indicators of economic activity – the stock market and home sales – have seen a boost recently. The stock market rallied yesterday on the news of the Treasury Department's plan to clean up toxic assets on bank balance sheets and a better than expected real estate report saw a 5 percent increase in sales of pre-owned homes. But the measure that matters for consumer confidence is jobs. Until the unemployment rate – currently at a 25 year high – begins to subside, confidence is likely to languish.
INDEX – As noted, the CCI is based on Americans' ratings of the economy, their personal finances and the buying climate. Ratings of personal finances, the most positive of the three measures, dipped this week to 45 percent. That is down 4 points from its recent high of 49 percent on Feb. 22 but 4 points better than its lowest, 41 percent two months ago. Fewer than a majority have rated their own finances positively for 35 weeks straight, surpassed only by a 40-week run in 1992-93.
Twenty-four percent rate the buying climate positively, 14 points from the long-term average and just 6 points from the low in October and August. One quarter or less have said it's a good time to buy things for 10 weeks straight.
Ratings of the economy are the weakest of the three measures, only 8 percent positive and in single digits for a record 20 weeks. Positive ratings of the economy are 31 points below their long-term average and 7 points off last year's average.
TREND – Since mid-October consumer confidence has been stuck in a 7-point range from last week's 2009 high, -47, to its 23-year low, -54 on Dec. 1 and Jan. 25. During that time, confidence suffered its worst four-week stretch, averaging -53 from mid-January to mid-February. Since then it's been unable to break out of a narrow 2-point range.
At -49 the CCI is 1-point from its 2009 average of -50 and is 6 points below the worst annual average on record, -44 in 1992. The index has been below -40 for a record 49 consecutive weeks and hasn't seen positive territory in over two years. It stands 38 points below its long-term average of -11.
Its best yearlong average was +29 in 2000; its best week, +38 in January 2000.
GROUPS – As usual, the CCI is higher among better-off groups, but negative across the board for the fourth straight week.
It's -19 among those with the highest incomes compared with -77 among those with the lowest, -45 among those who've attended college vs. -62 among high school dropouts, -42 among men while -54 among women, -43 among homeowners vs. -67 among renters, and -48 among whites vs. -57 among blacks.
Partisan differences remain: The index is -32 among Republicans vs. -59 among Democrats and -51 among independents.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Eight percent of Americans rate the economy as excellent or good; it was 6 percent last week. The highest was 80 percent Jan. 16, 2000. The worst was 4 percent Feb. 8.
PERSONAL FINANCES – Forty-five percent say their own finances are excellent or good; it was 48 percent last week. The best was 70 percent, last reached in January 2000. The worst was 41 percent Jan. 25.
BUYING CLIMATE – Twenty-four percent say it's an excellent or good time to buy things; it was 25 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 18 percent Oct. 19, Aug. 10 and Aug. 24, 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 March 22, 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.