Consumer Confidence Returns to 2006 High Point
Feb. 21, 2007 — -- For the first time this year consumer confidence has broken through to positive territory, equaling the high of 2006.
The ABC News/Washington Post Consumer Comfort Index stands at +1 on its scale of +100 to -100. Since mid-November of last year it's bounced between the positive and negative range. It dipped to -5 at the beginning of the year, but has rebounded to match its recent highs.
Not all the news is good. At the same time the CCI turned positive, a growing number of people say the national economy is getting worse: 41 percent say so, compared to about a third last month.
The CCI is trending above its long-term average, -9 in weekly polls since December 1985, and well up from its 2006 low of -19 in August. The return to the positive side is the fifth trip there in the last four months.
INDEX -- The index is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week, 48 percent rate the economy positively, matching its five-year high of 48 percent, also reached on Dec. 17, and eight points above the long-term average.
Sixty-four 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 40 percent call it a good time to buy things, about the average.
DIRECTION -- Each month the ABC/Post poll measures expectations -- whether people think the economy is getting better, getting worse or holding steady. Forty-one percent now say it's getting worse, significantly higher than where it was -- 34 percent -- in January and December 2006. For the last six months, the difference between those saying the economy was getting better and getting worse was narrowing or holding steady; today that trend is in the opposite direction.
The current number rating the economy as getting worse -- 41 percent -- is no different than usual; 39 percent have been pessimistic on average in polls dating back 25 years. Fewer, just 16 percent (about what it's been the last few months), think the economy's improving. Forty-one percent says it's holding steady.
TREND -- A rally in the last quarter of 2006 lifted the index into the positive range, from -19 on Aug. 27, amid soaring gasoline prices, to +1 in November and December. That trend flattened, and then turned south before returning to the positive side this week.
GROUPS -- The index is higher in better-off groups -- far better among higher-income Americans, college graduates and whites. It's +7 among men and -3 among women, the highest it's been since Nov. 2001.
Partisan differences remain, but have eased. The CCI is +30 among Republicans, -4 among independents and -13 among Democrats. That 43-point gap between Republicans and Democrats is its smallest since mid-August, albeit still bigger than its long-term average, 31 points. It peaked at 90 points in July 2004.
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; it was 46 percent 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-four percent say their own finances are excellent or good; it was 61 percent last week. The best was 70 percent on Aug. 30, 1998, matched in January 2000. The worst was 42 percent on March 14, 1993.
BUYING CLIMATE -- Forty percent say it's an excellent or good time to buy things; it was 39 percent last week. The best was 57 percent on Jan. 16, 2000. The worst 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.