Consumers Ride A Tough Economy
Consumer confidence flat and low; completes worst quarter since start of '92.
Sept. 30, 2008— -- Consumer confidence was flat and low this week in advance of the busted federal plan to stabilize ailing financial institutions, completing its worst quarter since the start of 1992.
The ABC News Consumer Comfort Index stands at -41 on its scale of +100 to -100, steady for three weeks straight. That's far below its 22-year average, -10, and on pace for one of its worst years on record.
Click here for PDF with charts and data table.
It's an unsettled environment: A separate ABC News/Washington Post poll found 88 percent concerned that Congress' rejection of the government plan could lead to a more severe downturn. But registered voters divided evenly on the plan itself, and despite the market turmoil 61 percent remained optimistic about their family's finances.
The public often doesn't react strongly to market dives, since most stockholders are buy-and-hold investors, often through stock funds. And another trend, more immediately felt by consumers, is better: gas prices have eased by 21 cents in the last two weeks.
Still, the CCI is low, and other economic news is troubling. The Labor Department reports jobless claims at a seven-year high, the pace of new home sales dropped to its lowest since 1991 and the banking industry continues to shudder. The situation remains fluid, moreover, and this week's CCI survey was completed Sunday, before Congress' rejected a stabilization package and the Dow responded with a nearly 778-point fall.
The CCI easily could turn down if views don't improve; it's based on a four-week rolling average, and the last few weeks have been stressed ones.
INDEX – The CCI is based on Americans' ratings of their finances, the national economy and the buying climate. Just 15 percent rate the national economy positively, down from 31 percent at the beginning of the year and an average of 39 percent in weekly polls since late 1985.
Forty-nine percent rate their personal finances positively – below 50 percent for 10 weeks straight, the longest such stretch since 1993. And just 24 percent rate the buying climate positively, 6 points over the all-time low hit twice last month.
TREND – The index reached a record low -51 in late May and has hovered between -40 and -50 for the past four months, compared to -20 at the start of the year. This year it's averaged -40, compared to last year's -11. 1992 was its worst year on average, -44.
The CCI averaged -45 in the quarter just ended, its worst since -47 in Q1 1992. However, in a glimmer of better results, its rate of decline quarter-to-quarter has slowed.
GROUPS – The index is higher in better-off groups but, for the 14th straight week, negative across the board. It's -7 among those with the highest incomes vs. -76 among those with the lowest, -34 among people who've been to college vs. -65 among high-school dropouts, -68 among blacks vs. -35 among whites, -54 among renters vs. -37 among homeowners and at -33 for men and -49 for women.
Sharp partisan differences remain: The index is -60 among Democrats, -40 among independents and -14 among Republicans.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Fifteen percent of Americans rate the economy as excellent or good; it was 17 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 – Forty-nine percent say their own finances are excellent or good; it was 48 percent last week. The best was 70 percent, last reached in January 2000. The worst was 42 percent on March 14, 1993.
BUYING CLIMATE –Twenty-four percent say it's an excellent or good time to buy things; it was 24 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 18 percent, Aug. 10 and 24.
METHODOLOGY – Interviews for the ABC News 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. 28, 2008. The results have a 3-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.