Consumer Confidence Lowest in Months
Sept. 6, 2005 — -- Consumer confidence reached its lowest level since just before Memorial Day this week, led by declining ratings of the national economy and a worsening outlook in the South.
Hurricane Katrina may be playing a role, but the decline predates Katrina. The ABC News/Washington Post Consumer Comfort Index has lost seven points in the last three weeks, dropping from -7 to -14 on its scale of +100 to -100. The decline in the South, similarly, began before Katrina hit.
Gasoline prices, at a record $3.07 today, are a major irritant. In a separate ABC/Post poll released Sunday, only 20 percent of Americans approved of the federal government's response to oil supply issues and rising gasoline prices in Katrina's wake. And 72 percent said they believe oil companies and gas dealers are taking advantage.
INDEX - The ABC/Post CCI is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week 34 percent rate the economy positively, the fewest since May 15. That's not unexpected: In an Aug. 21 ABC News poll, 81 percent expressed concern that rising gas prices would damage the broader economy.
In this week's CCI, 36 percent call it a good time to buy things, while more, 58 percent, say their own finances are good. These have been steadier than the national economy rating -- both are at their 2005 averages, while national economy ratings are four points below the year's average. The overall index is its lowest since May 22.
TREND - At -14, the index is below its average of the year so far, -11, and its long-term average, -9 in polls since December 1985. The index reached an all-time high of +38 in January 2000, and an all-time low of -50 in February 1992. This year, it's been as high as -7 and as low as -19.
GROUPS - As usual, the CCI is higher overall in better-off groups. It's +35 among higher-income Americans while -54 among those with the lowest incomes, 0 among college graduates while -25 among those who haven't finished high school, -9 among whites but -38 among blacks and -7 among men while -21 among women.
As noted, over the past three weeks, the index has declined particularly in the South. Since Aug. 14, the index in the South has gone from +2 to -13, while it's been more stable in other regions. This decline has continued in the aftermath of Katrina, but it started before the Hurricane. This week's data are the first to include post-Katrina interviews.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY - Thirty-four percent of Americans rate the economy as excellent or good; it was 37 percent last week and, as noted, 41 percent three weeks ago. The highest was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
PERSONAL FINANCES - Fifty-eight percent say their own finances are excellent or good; it was 59 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 - Thirty-six percent say it's an excellent or good time to buy things, unchanged from 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 Sept. 4, 2005. The results have a three-point error margin. 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.
The Washington Post replaced Money magazine as cosponsor of this index at the start of this year. The survey methodology remains the same.