Consumer Confidence Stabilizes
Aug. 22, 2006— -- Consumer confidence stabilized this week as gas prices posted their biggest one-week drop in nine months.
The ABC News/Washington Post Consumer Comfort Index is now at -14 on its scale of +100 to -100, compared with -15 last week. Confidence had fallen six points from mid-July to mid-August amid high pump prices and a weak job market.
The average price of a gallon of gasoline dropped 8 cents this week, to $2.92. Prices had been as high as $3.04 cents just two weeks ago, the second-highest nominal price on record.
INDEX -- The CCI is calculated according to the way Americans rate the national economy, the buying climate and their personal finances. Thirty-seven percent say the national economy is in good shape, compared with a long-term average of 40 percent. Thirty-three percent call it a good time to buy things; the average rating since December 1985 is 38 percent. Fifty-nine percent rate their own finances positively, compared with an average of 57 percent.
TREND -- The CCI has averaged -12 so far this year, compared with a long-term average of -9. It bottomed out this year at -19 in May, and peaked at -7 in March and April. It held between -9 and -11 throughout July, before taking a downturn in August.
Its all-time high was +38 in January 2000; its record low, -50 in February 1992.
GROUPS -- As usual, the index is higher in better-off groups. It's +42 among higher-income Americans while -69 among those with the lowest incomes, -2 among college graduates while -42 among those who haven't finished high school, -9 among whites but -47 among blacks and +4 among men while -30 among women.
The index continues to be best in the West, at +3, compared with -15 in the South, -17 in the Midwest and -26 in the Northeast. A partisan component to consumer confidence continues: The index is +18 among Republicans but -20 among Independents and -30 among Democrats.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Thirty-seven percent of Americans rate the economy as excellent or good; 36 percent rated is so last week. The highest percentage of Americans rating the economy as excellent or good was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
PERSONAL FINANCES -- Fifty-nine percent say their own finances are excellent or good, unchanged from last week. The highest percentage who said their finances were excellent or good was 70 percent on Aug. 30, 1998, matched in January 2000. The lowest was 42 percent on March 14, 1993.
BUYING CLIMATE -- Thirty-three percent say it's an excellent or good time to buy things, the same as last week. The highest percentage was 57 percent on Jan. 16, 2000. The lowest was 20 percent in the fall of 1990.
METHODOLOGY -- Interviews for the ABC News/Washington Post Consumer Comfort Index are reported in a four-week rolling average. This week's results come from telephone interviews among a random national sample of 1,000 adults in the four weeks that ended Aug. 20, 2006. The results have a three-point error margin. Field work was done 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.