Consumer Confidence at Five-Year High, but May Run Out of Gas
March 13, 2007 — -- Consumer confidence hit a five-year high in the latest ABC News/Washington Post survey. But gas prices may yet catch up.
The ABC/Post Consumer Comfort Index stands at +2 on its scale of +100 to -100, compared with -1 last week and a 2007 average of -2. It hasn't been this high in more than five years, since Oct. 7, 2001.
Whether it holds up is another question. Confidence in the past has been highly sensitive to gasoline prices, and the average price of a gallon of regular unleaded has risen by 39 cents in the last six weeks. There can be a lag before rising gas prices negatively impact consumer confidence. But ultimately, they usually do.
Index
The ABC/Post index is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week, 47 percent rate the economy positively, almost matching the five-year high of 48 percent, last seen three weeks ago, and seven points above its long-term average, 40 percent in weekly polls since late 1985.
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 42 percent call it a good time to buy things; the average is 38 percent.
Trend
The CCI's above its long-term average, -9, and well up from its 2006 low, -19 last August. Before this week, it hadn't strayed beyond a range from -3 to +1 since Jan. 14, and, again, had not reached +2 since Oct. 7, 2001.
Groups
The index is higher in better-off groups -- far better among higher-income Americans, those married, college graduates and whites. It's +11 among men and -7 among women. And partisan differences remain: +36 among Republicans, -1 among independents, -20 among Democrats.
Components
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; it was 45 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 63 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-two percent say it's an excellent or good time to buy things; it was 41 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 March 11, 2007. 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.