Confidence: An Icy Wind
Only 14 percent rate national economy positively.
Oct. 7, 2008— -- As the presidential contest heats up, Americans' views of the economy remain ice cold. Only 14 percent rate the national economy positively, a fifth call this a good time to buy and just half say their own finances are in good shape.
Each of those is well below its long-term average, especially the first two. And the ABC News Consumer Comfort Index, based on these views, stands at -43 on its scale of +100 to -100, down 23 points this year and 33 points below its 22-year norm.
Click here for PDF with charts and data table.
With the index just 8 points from its record low, confidence reflects the influence of the turmoil in banking and the financial markets. Indeed it otherwise might be on the rise, given the improvement in gasoline prices, the main drag on consumer views this year. Gas fell by 15 cents a gallon this week and by 36 cents in the last three.
INDEX – Twenty-five percent or fewer have rated the buying climate positively for 27 straight weeks, the longest run on record; it's 21 percent this week. Fewer still, 14 percent, rate the economy positively, down 17 points on the year and 25 points off the long-term average. As noted, 50 percent rate their personal finances positively, better than the 45 percent it hit in early September, but down 8 points on the year and 7 points off the long-term average.
While the index historically has been sensitive to rising gasoline prices, it's shown less of a direct reaction to the ups and downs of the stock market. Most Americans own stock investments, but most indirectly and on a long-term, buy-and-hold basis.
TREND – The index began the year at -20 and headed down quickly, setting a new record low of -51 May 25. It's failed to climb above -41 since late April, a 24-week run that's the longest at this level since 1992. The CCI's averaged -40 on the year, also the worst since its -44 across 1992.
At -43, the index is much worse than its average in 22 years of surveys, -10, and miles from its record high, +38 in 2000.
GROUPS – The index is higher as usual in better-off groups but still negative across the board, for the 15th straight week. It's -10 among those with the highest incomes vs. -78 among those with the lowest, -36 among people who've been to college vs. -68 among high-school dropouts, -65 among blacks vs. -38 among whites, -55 among renters vs. -39 among homeowners and -35 for men vs. -50 for women.
Sharp partisan differences remain: The index is -60 among Democrats, -44 among independents and -17 among Republicans.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Fourteen percent of Americans rate the economy as excellent or good; it was 15 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 – Fifty percent say their own finances are excellent or good; it was 49 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-one 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 Oct. 5, 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.