Confidence Struggles as Job Losses Mount

Confidence Struggles as Job Losses Mount

Ninety-Five Percent Rate the Economy Negatively

Analysis by Patrick Moynihan

March 10, 2009

Consumer confidence is stuck in a rut, matching its best number this year but hanging close to the record low, as the unemployment rate hit a 25-year high.

The ABC News Consumer Comfort Index stands at -48 on its scale of +100 to -100, returning to the 2009 high. That's not much of an accomplishment; confidence has been in a 1-point range for four weeks and is 6 points from its worst ever, -54 on Jan. 25. It's been two full years since confidence was last in positive territory. In that time it's plunged steeply and is on pace for its worst year.

Click here for PDF of analysis with charts and data table.

Of the three components of the CCI, it's ratings of the economy that are dragging the index down. Nearly all Americans have rated the economy negatively for the past two months, a dismal streak not seen in 23 years of weekly polls.

It's no surprise confidence hasn't improved. Last week the Bureau of Labor Statistics reported the unemployment rate at 8.1 percent, the highest level since December 1983. Since the recession began 15 months ago, 4.4 million jobs have disappeared and the bulk of them, 2.6 million, in the last four months alone. A recent ABC News/Washington Post poll finds economic anxiety is fueled by household job losses and pay cuts.

INDEX  The CCI is based on Americans' ratings of the economy, their personal finances and the buying climate. Ratings of personal finances are, as usual, the strongest of the three measures. At 48 percent positive, they're 7 points from their low in late January and 9 points below the long-term average in weekly polls since late 1985. Fewer than a majority have rated their own finances positively for 33 weeks straight, surpassed only by a 40-week run in 1992-93.

Twenty-five percent rate the buying climate positively, it's best in two months. Still, they're 13 points from the long-term average and just 7 points from the low in October and August. Fewer than a third of Americans have said it's a good time to buy things for 69 weeks, second only to a stretch from 1990-93.

For the fourth straight week, only 5 percent rate the economy positively; it's been that low or lower for eight weeks and fewer than 10 percent for 18 weeks, both records. Positive ratings of the economy are 34 points below their long-term average and 10 points off last year's average, itself the second lowest annual mark on record.

TREND - Since mid-October, the CCI hasn't wandered outside a narrow 6-point range, from -48 to -54 - a record slump of 22 weeks. It's been below -40 for 46 consecutive weeks, another record, and, as mentioned, hasn't seen positive territory in two years.

The index's average for the year so far is -50, 39 points below its long-term average and 6 points below the worst annual average on record, -44 in 1992. It's miles away from the record high, +38 in January 2000.

GROUPS - The CCI is higher as usual among better-off groups, but negative across the board for the second straight week after two weeks of the highest income bracket slipping into positive territory.

It's -6 among those with the highest incomes compared with -72 among those with the lowest, -46 among those who've attended college vs. -55 among high school dropouts (their best in 11 weeks), -43 among men while -51 among women, -43 among homeowners vs. -57 among renters, and -47 among whites vs. -57 among blacks.

Partisan differences remain: The index is -31 among Republicans vs. -58 among Democrats and -46 among independents (their best since the start of the year).

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

NATIONAL ECONOMY - Five percent of Americans rate the economy as excellent or good, the same as last week. The highest was 80 percent Jan. 16, 2000. The worst was 4 percent Jan. 8.

PERSONAL FINANCES - Forty-eight percent say their own finances are excellent or good, the same as last week. The best was 70 percent, last reached in January 2000. The worst was 41 percent Jan. 25.

BUYING CLIMATE - Twenty-five 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 Oct. 19, Aug. 10 and Aug. 24, 2008.

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 March 8, 2009. 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.

Click here for PDF of analysis with charts and data table.