Consumer Confidence Matches 2006 High
Oct. 17, 2006 — -- Consumer confidence now matches its highest level of the year, aided by such factors as 10 consecutive weeks of reduced gas prices and a strong stock market. And expectations, too, have become less bleak: The number of economic pessimists is at its lowest in 10 months.
The latest ABC News/Washington Post Consumer Comfort Index stands at -7 on its scale of +100 to -100, up eight points in a month to tie its 2006 highest level, last seen in the spring. It's now five points above its average for 2006 and 12 points above its low for the year.
Looking ahead, 45 percent of Americans say the economy is getting worse -- a substantial number, but the lowest since January, down from 54 percent in mid-August.
The CCI is calculated according to Americans' ratings of the current national economy, the buying climate and their personal finances. Forty-three percent say the economy's in good shape, the highest number saying that since December 2004, five points above its average for the year. Thirty-seven percent call it a good time to buy things, which is about average. As usual, many more, 59 percent, rate their own finances positively.
DIRECTION -- Each month, the ABC/Post poll measures expectations -- whether people believe the economy is getting better, worse or holding steady. As noted, 45 percent say it's worsening, down from 50 percent last month and 54 percent in August.
Still, that's higher than average -- 39 percent on average have expressed pessimism in polls dating back 25 years. And far less -- just 17 percent -- say the economy's improving.
Six in 10 Democrats say the economy's getting worse, compared with just 15 percent of Republicans. But, critically in an election year, independents agree more with the Democrats -- 53 percent of them say the economy's getting worse.
TREND -- The CCI is up 12 points since the end of August, when it bottomed out at -19, and now matches its best this year, reached previously in March and April. Its all-time high was +38 in January 2000; its record low, -50 in February 1992. It's averaged -12 so far this year and -9 since December 1985.
GROUPS -- As usual, the index is higher in better-off groups. It's +46 among higher-income Americans while -60 among those with the lowest incomes, +4 among college graduates while -28 among those who haven't finished high school, -3 among whites but -34 among blacks and +10 among men while -24 among women.
The index is better in the South (+1) and West (-2) than in the Midwest (-13) and Northeast (-23). And three weeks before Election Day, a strong political element continues, with Republicans far more positive about the economy (a CCI of +35) than either independents (-19) or Democrats (-27).
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Forty-three percent of Americans rate the economy as excellent or good; 42 percent rated it 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-seven percent say it's an excellent or good time to buy things, also 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 Oct. 15, 2006. The results have a three-point error margin. The expectations question was asked of 500 respondents Oct. 4-15; that result has a 4.5 point margin of error. 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.