Confidence Approaches Elusive Positive Zone
Feb. 7, 2007 — -- Consumer confidence inched near the elusive positive zone this week, improving slightly from its shaky start to the new year a month ago.
The ABC News/Washington Post Consumer Comfort Index stands at -1 on its scale of +100 to -100, little changed from -3 the last two weeks but better than its -5 on Jan. 7.It briefly hit positive numbers (+1) in December and November, for the first time since, also briefly, spring 2002.
While still outside the happy zone (which the index sustained from mid-1997 to mid-2001), the CCI is better than usual (a 21-year average of -9) and a good deal better than its recent low, -19 last August. Lower gas prices surely have helped.
INDEX -- The ABC/Post CCI is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week 47 percent rate the national economy positively -- close to its recent five-year high of 48 percent, reached Dec. 17, and seven points above the long-term average in weekly polls since late 1985.
Sixty-one percent rate their personal finances positively, compared with a long-term average of 57 percent. (It hit 65 percent in mid-November, the most since August 2001.) And 41 percent call it a good time to buy things, three points over the long-term average.
TREND -- As noted, a rally in the last quarter of 2006 lifted the index into the positive range, from its 2006 low of -19 on Aug. 27 to +1 in November and December. That trend flattened, then turned south before a slight gain more recently.
The CCI is a long way from its best days, an average of +29 in 2000 (peaking at +38 in January 2000). But it's been vastly worse -- an average of -44 in 1992, bottoming out at -50 that February.
GROUPS -- The index is higher in better-off groups -- far higher among higher-income Americans, college graduates and whites. It's +7 among men and -8 among women. And big partisan differences remain: +32 among Republicans, but 1 among independents and -23 among Democrats.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Forty-seven percent of Americans rate the economy as excellent or good; 46 percent rated it so last week. The highest was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
PERSONAL FINANCES -- Sixty-one percent say their own finances are excellent or good; 59 percent rated them so last week. The highest was 70 percent on Aug. 30, 1998, matched 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, the same as last week. The highest was 57 percent on Jan. 16, 2000. The lowest was 20 percent in fall 1990.
METHODOLOGY -- Interviews for the ABC News/Washington Post 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 Jan. 28, 2007. The results have a three-point margin of error. 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.