Confidence Hits Another New Low as Recession's Officially Recognized
Ninety-three percent now say the national economy's in bad shape.
Dec. 2, 2008— -- Consumer confidence has reached a new low in weekly polling since late 1985, coinciding with official word the U.S. economy has been in recession the past year.
The announcement is nothing new to consumers: The ABC News Consumer Comfort Index has fallen from -17 in mid-December 2007 to -54 today. En route it's matched or surpassed its previous low, set in 1992, eight times this year.
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Indeed the CCI, figured on a scale of +100 to -100, has been at or below -50 for an unprecedented four weeks straight. And its average in the current recession to date, -40, is worse than its average in either of the past two recessions, +3 in March to November 2001 and -33 during the deeper recession from July 1990 to March 1991.
INDEX – The index is based on Americans' ratings of the economy, their personal finances and the buying climate. Ninety-three percent now say the national economy's in bad shape and 58 percent rate their own finances negatively, each matching its worst on record. Eighty percent call it a bad time to buy things, 2 points from its record.
Ratings of the buying climate hardly augur well for the holiday season. Nor did a separate ABC News poll two weeks ago in which a record-tying 51 percent planned to spend less this year, and 68 percent said they'd look for sales. The only bright spot: The retreat in gasoline prices, down for 11 weeks to $1.81, might free up some cash.
Among the index measures, positive ratings of personal finances were this low just once before, in March 1993; they're down 16 points on the year and 15 points off the long-term average. Fewer than a majority have rated their finances positively for 19 weeks straight, the longest such stretch since 1992-1993.
Positive ratings of the economy now match their low of two weeks ago and, previously, late 1991 and early 1992. They're down 24 points on the year, 32 points off the long-term average and have been in single digits for a month, the longest stretch since late 1992.
Positive ratings of the buying climate, at 20 percent, are 2 points shy of the record low set this past October and August, down 11 points on the year and 18 points off their average. Twenty-five percent or fewer have rated the buying climate positively for 35 straight weeks, the longest run on record.
TREND – Before this year the CCI's low was -50 in February 1992; in 2008, as noted, it's matched or exceeded that level eight times. The current -54 marks the third new low this year in nearly 1,200 consecutive weeks of polling.
The index has averaged -42 for the year, 31 points from last year's -11 average, the sharpest year-over-year drop on record. 2008's average is surpassed only by -44 in 1992. That compares with its long-term average of -11 and a high of +38 in January 2000.
GROUPS – The CCI has been negative across demographic groups for 23 straight weeks, but with differences, mostly influenced by income levels. It's -27 among people with the highest incomes (matching their low point from Nov. 16) compared with -80 among those with the lowest incomes; -50 among those who've been to college (their lowest since March 1991) vs. -67 among high-school dropouts; -72 among blacks vs. -48 among whites; and -56 among women vs. -49 among men (matching their low from Aug. 17). The index is -74 among renters vs. -46 among homeowners (matching a record low).
Partisan differences are the narrowest they've been since July 2001, with the index among Republicans now at -40, their lowest. It's -59 among Democrats and -54 among independents.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY – Seven percent of Americans rate the economy as excellent or good, matching its low set two weeks ago and in late 1991 and early 1992; it was 8 percent last week. The highest was 80 percent on Jan. 16, 2000.
PERSONAL FINANCES – Forty-two percent say their own finances are excellent or good, matching its worst ever on March 14, 1993; it was 43 percent last week. The best was 70 percent, last reached in January 2000.
BUYING CLIMATE – Twenty percent say it's an excellent or good time to buy things; it was 21 percent last week. The best was 57 percent on Jan. 16, 2000. The worst was 18 percent this Oct. 19, Aug. 10 and Aug. 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 Dec. 1, 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.