Positive Trends in CCI as 2006 Nears Its Close

Dec. 19, 2006 — -- Americans' ratings of current economic conditions match their 2006 high, and just a third of those surveyed believe the economy's getting worse -- two positive marks as the year's end looms.

The ABC News/Washington Post Consumer Comfort Index stands at +1 this week on its scale of +100 to -100, essentially unchanged in the last month. It's come a long way since summer, soaring from -19 in August to +1 in mid November, then stabilizing.

The CCI has averaged -10 so far this year -- on track to reach its highest annual average since 2001, thanks in large part to its extraordinary rally the last few months.

Expectations follow a similar trend. Thirty-four percent are pessimistic about the direction of the economy, down steadily from 54 percent in August to the fewest in nearly two years.

INDEX -- The CCI is based on ratings of the national economy, buying climate and personal finances. This week 48 percent rate the economy positively, the most since August 2001, and eight points above its average since December 1985.

Forty-one percent call it a good time to buy things, compared with a long-term average of 38 percent; and 63 percent say their own finances are in good shape, six points above average.

DIRECTION -- Separately each month, the ABC/Post poll measures expectations -- whether people believe the economy is getting better, getting worse or holding steady. Thirty-four percent now say it's getting worse, about where it was -- 37 percent -- last month. But that's down from 45 percent in October and, as noted, 54 percent in August. It's now the fewest since January 2005.

That's somewhat better than usual; on average, 39 percent have been pessimistic in polls dating back 25 years. As usual, fewer, 18 percent, believe the economy is improving (that's about what it's been the last few months). The plurality, 46 percent, says it's holding steady.

TREND -- As noted, the index has averaged -10 so far this year, about its overall average, -9, in weekly polls since December 1985. Its highest annual average was +29 in 2000; its worst, -44 in 1992. Its weekly high was +38 in January 2000; its low, -50 in February 1992.

GROUPS -- As usual, the index is higher in better-off groups. It's +40 among higher-income Americans while -33 among those with the lowest incomes, +16 among college graduates while -18 among people who haven't finished high school, +5 among whites while -42 among blacks and +13 among men while -10 among women.

At +15, the index remains strongest in the West, compared with -17 in the Northeast, -5 in the Midwest and +6 in the South. Huge partisan differences remain: The CCI is +45 among Republicans but -14 among independents and -18 among Democrats.

Here's a closer look at the three components of the ABC/Post CCI:

NATIONAL ECONOMY -- Forty-eight percent of Americans rate the economy as excellent or good; 46 percent rated it so last week. The highest number was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.

PERSONAL FINANCES -- Sixty-three percent say their own finances are excellent or good; 62 percent rated it so last week. The highest percentage who said their finances were excellent or good was 70 percent on Aug. 30, 1998, a number hit again in January 2000. The lowest was 42 percent on March 14, 1993.

BUYING CLIMATE -- Forty-one percent say it's an excellent or good time to buy things; 43 percent said that last week. The highest percentage for this field 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 Dec. 17, 2006. The expectations question was asked of 500 respondents Dec. 6-17; that result carries a 4.5-point margin of error. The results have a three-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.

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