Confidence Stabilizes Along With Gas Prices

Consumer Confidence Flattens at Its Lowest Level Since Last Summer

Analysis By JON COHEN

Apr. 28, 2005 - Consumer confidence has stabilized after a steep slide that coincided with the recent run-up in gasoline prices, flattening out at its lowest level since early last summer.

The ABC News/Washington Post Consumer Comfort Index stands at -17 on its scale of +100 to -100, roughly steady for the past three weeks after losing 11 points in five weeks. Gas prices similarly have stabilized in the last two weeks, but are up 26 percent since the start of the year.

The weekly CCI is below its 19-year average of -9 and down from a recent high of -4 fewer than five months ago. It hasn't been in positive territory since April 2002.

There are other signs of economic discontent: A separate ABC News/Washington Post poll this week found George W. Bush's job approval rating for handling the economy near a career low; 40 percent approve, while 57 percent disapprove.

Sixty-four percent in that same poll said the recent rise in gas prices has caused financial hardship in their household, up seven points from last month to tie the record (set a year ago) in polls since February 2000.

The impact of gas prices, like the CCI itself, varies greatly by income: Fifty-six percent of Americans in low-income households call gas prices a serious hardship, compared with 21 percent of people in the highest-income households.

INDEX -- The ABC/Post index is based on Americans' ratings of the national economy, the buying climate and their personal finances. Expectations on the economy's direction, measured separately once a month, hit a two-year low last week.

This week 34 percent say it's a good time to buy things, down somewhat from a recent high in mid-March. About as many, 35 percent, rate the economy positively, while more, 56 percent, say their personal finances are OK.

TREND -- At -17, the CCI is six points below its average to date in 2005, -11; it also averaged -11 in 2004. Its best year was 2000, when the index averaged +29 and reached a one-week peak of +38; its worst was 1992, when it averaged -44 and hit -50.

GROUPS -- The recent decline in the index occurred mainly among lower-income Americans and seniors, groups especially susceptible to increased fuel prices. At -75, the index among people in low-income households this week is its lowest since 1993. It's +42, by contrast, among higher-income Americans. And it's -32 among seniors, down from as high as -7 in this group in mid-March.

The index is -3 among college graduates while -55 among those who haven't finished high school and -13 among whites while -55 among blacks. At five points, the gap between men (-14) and women (-19) is somewhat narrower than it is typically.

Regionally, the index ranges from -14 in the South to -23 in the Northeast. And it's +19 among Republicans, but -22 among independents and -40 among Democrats.

Here's a closer look at the three components of the ABC/Post CCI:

NATIONAL ECONOMY -- Thirty-five percent of Americans rate the economy as excellent or good; it was 36 percent last week. The highest was 80 percent on Jan. 16, 2000. The lowest was seven percent in late 1991 and early 1992

PERSONAL FINANCES -- Fifty-six percent say their own finances are excellent or good; it was 57 percent last week. The best was 70 percent on Aug. 30, 1998, matched in January 2000. The worst was 42 percent on March 14, 1993.

BUYING CLIMATE -- Thirty-four percent say it's an excellent or good time to buy things; it was 33 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 April 24, 2005. 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.

The Washington Post replaced Money magazine as cosponsor of this index at the start of this year. The survey methodology remains the same.

See previous analyses in our Poll Vault.