POLL: Just in Time for the Holidays: Confidence Hits a Two-Year Low
Consumer confidence slipped to a two-year low this week.
Nov. 27, 2007 — -- Consumer confidence slipped to a two-year low this week -- just in time for the holidays.
With retailers anxiously eyeing their prospects, the ABC News/Washington Post Consumer Comfort Index hit -21 on its scale of +100 to -100, down 6 points in the last three weeks to its lowest since October 2005, just after Hurricane Katrina.
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Among the index's three components, just 31 percent call it a good time to spend money now -- again a two-year low. That comports with initial suggestions that while holiday shoppers are turning out, they may be looking for bargains, and spending less.
Consumer gloom is not recent: The ABC/Post index has labored in negative double digits for 16 weeks, its longest run at that level since an 18-week period after Katrina nailed the Gulf Coast and sent gas prices soaring.
There's plenty of fuel for today's discontent: Gasoline's at $3.10 a gallon (it peaked at $3.06 post-Katrina), oil prices have set new nominal records just as temperatures headed down, the housing and credit shocks keep coming and the stock market's been shaky.
INDEX -- The ABC/Post CCI is based on Americans' ratings of their personal finances, the national economy and the buying climate. Ratings of the buying climate are down 5 points in three weeks, and 12 points below their 2007 high last March.
A similar 33 percent rate the national economy positively, steady the past month but still low compared with a 2007 high of 48 percent.
Ratings of personal finances, the strongest of the measures, are showing signs of strain -- 55 percent rate them positively, 4 points below the 2007 average and the fewest in nearly three months. They've edged down from a recent high of 61 percent in early October, and are now just 2 points off their 2007 low, 53 percent in late August.
TREND -- At -21, the CCI matches its level of Oct. 30, 2005, very near its post-Katrina low, -23 in mid-September '05.
Despite its current slump the CCI has averaged -9 this year, matching its long-term average and setting it up for its best year since 2001, when it was averaged +4. But that owes to a strong start: The index averaged –2 in the first three months of the year, even brushing into the elusive positive zone in February and March.
It's been a bumpy road since, including a 9-point drop in four weeks from March to April, a 12-point drop in May to June, its largest ever one-week drop of 9 points in August, and now a 6-point drop in three weeks this month.
In weekly polls since 1985, the index has ranged as high as +38, in January 2000; and as low as -50, in February 1992.
GROUPS -- As usual, the CCI is higher in better-off groups. It's +12 among higher-income people while -54 among those with the lowest incomes, -9 among those who've been to college while -36 among high-school dropouts and -19 among whites but -40 among blacks. The gender gap continues to widen this week, at -10 among men versus -30 among women.
Partisan differences remain: The index is +14 among Republicans but -30 among independents and -33 among Democrats.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Thirty-three percent of Americans rate the economy as excellent or good; it was 33 percent last week. The highest was 80 percent Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
PERSONAL FINANCES -- Fifty-five percent say their own finances are excellent or good; it was 56 percent last week. The highest was 70 percent last reached in January 2000. The lowest was 42 percent March 14, 1993.
BUYING CLIMATE -- Thirty-one percent say it's an excellent or good time to buy things; it was 32 percent last week. The highest was 57 percent 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 Nov. 25, 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.