POLL: Pessimism Matches Two-Year High as Ratings of Economy Stumble
Pessimism about economy grew this month, along with current economic ratings.
Aug. 14, 2007 — -- Pessimism about the economy grew this month, along with current economic ratings. Despite these shaky views, confidence overall remains steady this week.
The ABC News/Washington Post Consumer Comfort Index stands at -11 this week on its scale of +100 to -100, in the same range as last week's -9, but down six points in the last three weeks. The recent slide wipes clean a mid-July surge as the index continues its bumpy summertime ride.
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Ratings of the national economy reached a two-month low, pushing confidence back into negative double-digit territory. In a separate measure of expectations, 57 percent of Americans believe the economy is getting worse, well above the 26-year average of 39 percent. Pessimism hasn't been this high since October 2005, in the aftermath of Hurricane Katrina.
Things could be worse. The price of gas continues to decline, dropping 7 cents this week to $2.77 a gallon and 28 cents over the past month, according to Department of Energy surveys.
INDEX -- Positive ratings of the economy, at 37 percent, are taking more of a hit than the other components of the CCI and have dropped seven points since July 22. During that same time, ratings of the buying climate, at 39 percent, and personal finances, at 58 percent, have remained flat.
EXPECTATIONS -- As noted, pessimism is at a 22-month high, with 57 percent saying the economy is getting worse. Only 15 percent say the economy is improving, down from a 2007 high of 18 percent in January but up slightly from last month when 12 percent expressed optimism.
Pessimism is now 18 points higher than its long-term average in polls since March 1981 and 23 points higher than its 2007 low. It is, however, still lower than its all-time high of 77 percent in November and October of 1990.
The 42-point gap between optimism and pessimism is at its highest since May 2006. Pessimism is increasing, with fewer people on the fence this month. Only 26 percent believe the economy is "staying the same" this month, down 10 points from last month.
TREND -- With a rating of -11, the CCI is two points below its long-term average from weekly polls beginning in December 1985. It is five points below its 2007 average of -6 and in the same range as last week's ratings of -9. This year's ratings have ranged from +2 on March 11 to -15 on June 3.
GROUPS -- As usual the CCI is higher in better-off groups. It's +47 among higher-income people while -31 among those with the lowest incomes, +9 among those who've been to college while -44 among high-school dropouts and -6 among whites but -32 among blacks. The gap between men and women continues to be narrower this week with men at -9 and women at -11.
Partisan differences remain: The CCI is +16 among Republicans, but -20 among independents and -15 among Democrats.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY -- Thirty-seven percent of Americans rate the economy as excellent or good; 40 percent rated it so 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-eight percent say their own finances are excellent or good; 57 percent rated them so last week. The highest was 70 percent, last reached in January 2000. The lowst was 42 percent March 14, 1993.
BUYING CLIMATE -- Thirty-nine percent say it's an excellent or good time to buy things; 39 percent said so 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 Aug. 12, 2007. The results have a three-point error margin. The expectations question was asked of 500 respondents July 31 -- Aug. 12; 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.