Confidence Sags Amid Gas Price Hardship
April 17, 2007 — -- Rising gas prices likely are keeping consumer confidence lower than it would be ordinarily: Two-thirds of Americans -- just shy of a record high -- are feeling the pinch at the pump, and confidence remains in the negative zone.
The ABC News/Washington Post Consumer Comfort Index stands at -5 this week on its scale of +100 to -100, little changed from its 2007 low of -7 last week and down from the +2 it touched in mid March.
No wonder: Gas rose an average 7 cents a gallon in the past week and is up 71 cents over the last 11 weeks, according to the federal Department of Energy's weekly survey.
Indeed, in a separate ABC News/Washington Post poll this week, 67 percent of Americans say gas prices are causing financial hardship in their households, up 10 points since May 2006 to the second highest in polls since early 2000.
Just over half of those experiencing financial hardship say it's "serious" hardship (totaling 36 percent of all adults). Naturally, more economically vulnerable groups are hit hardest -- eight in 10 of those with household incomes below $35,000 report hardship because of gas prices, compared with fewer than half of those in $75,000-plus households.
While gas prices have increased for the past 11 weeks, other indicators have been more favorable for the economy. Unemployment was just 4.4 percent in March, incomes have risen as employers bid for scarce workers, and the stock market is surging again.
INDEX -- The ABC/Post index is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week 44 percent rate the economy positively -- about the same as the 2007 average, 45 percent, and compared to a long-term average, 40 percent in weekly polls since late 1985.
Sixty 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 October 2001.) Thirty-nine percent call it a good time to buy things, a point off the average.
DIRECTION -- In terms of expectations, measured separately on a monthly basis, 46 percent said the economy's getting worse, about the same as said so last month. Economic pessimists continue to outnumber optimists by 33 points, also similar to last month.
Pessimism had dropped sharply -- by 20 points from August 2006 to January 2007 -- before starting back up, along with the price of gas.
The number of Americans who say the economy is getting worse is seven points higher than its long-term average in polls since March 1981. Far fewer, just 13 percent, think the economy's improving, while 40 percent say it's holding steady.
TREND -- The CCI started the year at -5, reached its high for the year, +2, the second week of March but then dropped steeply, by seven points, to -5 the next week. April has been the cruelest month, with confidence in the -5 to -7 range.
Nonetheless, the average so far this year, -3, is better than the index's long-term average, -9. Its record low was -50 in February 1992; its all-time high, +38 in January 2000.
GROUPS -- As usual, confidence is higher among better-off Americans. The index is +44 among higher-income adults while -44 among those with the lowest incomes, +15 among college graduates while -27 among high-school dropouts and +1 among whites but -32 among blacks. It's +5 among men while -14 among women.
Partisan differences remain. The CCI is +33 among Republicans, -14 among independents and -26 among Democrats.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Forty-four percent of Americans rate the economy as excellent or good; 43 percent rated it so last week. The highest was 80 percent on Jan. 16, 2000. The lowest was seven percent in late 1991 and early 1992.
PERSONAL FINANCES -- Sixty percent say their own finances are excellent or good; 57 percent said so last week. The best was 70 percent on Aug. 30, 1998, matched in January 2000. The lowest was 42 percent on March 14, 1993.
BUYING CLIMATE -- Thirty-nine 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 April 15, 2007. The results have a three-point error margin. The expectations question was asked of 500 respondents April 11-15; that result has a 4.5-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.
The question on gas price increases is from a larger ABC News/Washington Post poll of 1,141 respondents from April 12-15; that result has a three-point error margin. Field work for that survey was by TNS of Horsham, Pa.