POLL: Consumer Confidence Takes Major Hit
Indicator is at lowest level since the aftermath of Hurricane Katrina in 2005.
Aug. 21, 2007 — -- Consumer confidence sustained its steepest one-week drop in more than 20 years of ongoing polls this week, falling to its lowest level since the aftermath of Hurricane Katrina in late October 2005.
The ABC News/Washington Post Consumer Comfort Index lost an extraordinary nine points to -20 on its scale of +100 to -100, down from -11 last week, and a summertime high of -5 four weeks ago. Before now, the index never has fallen by more than seven points in a single week in 1,130 weeks of consecutive polling.
The decline is broadly based among population groups, and there seems not to be a single negative event to blame, but a confluence: the stock market's fall, troubled housing and credit markets, the Fed's expressions of concern about an economic downturn, the cumulative effect of high gasoline prices during the summer driving months, and a public broadly dispirited over the course of national events, driven by the unpopular war in Iraq.
Last week's ABC/Post consumer survey hinted at this change. It found a significant increase in pessimism about the economy's future, with 57 percent of Americans saying the economy's getting worse, far above the 26-year average of 39 percent, and the most since post-Katrina October 2005. This week, ratings of current conditions followed.
The drop in confidence, in fact, has been brewing since late July. The CCI reached its summertime high of -5 July 22, then turned down to -8 the next week, and -11 last week. The index is based on a four-week rolling average of 250 weekly interviews; this week, the positive week of July 22 rolled out of the average, and far bleaker views the past week rolled in.
INDEX — The index is based on Americans' ratings of the national economy, their personal finances, and the buying climate, and all took a hit this week: Just 32 percent say the economy's in good shape, down five points in a week to the fewest since October 2005; 53 percent say their personal finances are OK, down five points to the fewest since October 2004; and 35 percent call it a good time to spend money, matching what it was this past June.