POLL: Confidence Spikes after Three-Month Slump
July 24, 2007 — -- Consumer Confidence rebounded sharply this week, again rallying out of a slump that started last spring.
The ABC News/Washington Post Consumer Comfort Index jumped to -5 on its scale of +100 to -100, up six points from last week -- the seventh time in the index's 21-year history that it's risen by six or more points in a single week.
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Of the index's three components, increasingly healthy ratings of the buying climate and a turnaround in views of personal finances fueled its jump. Ratings of the national economy held about steady.
The advance coincides with a 9-cent decrease in the price of gas in this week's U.S. Department of Energy survey. Gas dropped to $2.96, 1.5 percent below where it was a year ago. Gas hasn't been below its year-ago level since the index began its dry spell three months ago.
INDEX – Consumers may at last have hit their summer stride: Positive ratings of the buying climate have climbed steadily, from 33 percent on June 3 to 39 percent now. Fifty-nine percent now rate their personal finances positively; last week's 55 percent was a 2007 low.
At 44 percent positive, ratings of the national economy are essentially unchanged from last week. But the measure has increased by seven points since June and is inching toward its 2007 high of 48 percent on February 19.
TREND – The CCI is situated comfortably between its 2007 high and low, only seven points from its high of +2 on March 11 and 10 points from its low of -15 on June 3. It's essentially the same as its 2007 average of -6, but it's four points above its lifelong average of -9.
The CCI saw a similar spike three weeks ago when it increased by five points on July 1. Altogether, the index has increased by 10 points since it hit its 2007 low seven weeks ago.
GROUPS – As usual, confidence is higher among better-off Americans. The index is +46 among higher-income people while -41 among those with the lowest incomes, +10 among those who've been to college while -34 among high school dropouts and -3 among whites but -29 among blacks. It's -4 among men compared with -6 among women, an unusually narrow gap for the third week in a row.
Big partisan differences remain: The CCI is +28 among Republicans, but -8 among independents and -20 among Democrats. Still, the 48-point gap between Democrats and Republicans has been bigger, peaking at 90 in July of 2004.
Here's a closer look at the three components of the ABC/Post CCI:
NATIONAL ECONOMY – Forty-four percent of Americans rate the economy as excellent or good; it was 42 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-nine percent say their own finances are excellent or good; it was 55 percent last week. The best was 70 percent last reached in January 2000. The worst was 42 percent on March 14, 1993.
BUYING CLIMATE – Thirty-nine percent say it's an excellent or good time to buy things; it was 36 percent last week. The best was 57 percent on Jan. 16, 2000. The worst 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 July 22, 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.