Consumer Confidence Rises Sharply

Consumer confidence rose sharply this week, scoring one of its best one-week gains as Americans' ratings of their own finances improved and economy ratings matched their best of the year.

The latest ABC News/Washington Post Consumer Comfort Index stands at -8 on its scale of +100 to -100, up five points from last week and just shy of its best so far this year, -7. This week's advance marks only the 17th time the index has gained five or more points in one week in more than 1,000 weekly polls.

Consumer confidence had been on the fence the last few weeks, holding essentially steady amid mixed economic reports. But falling gas prices and a strong stock market may now be having a positive effect.

The index is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week 42 percent say the economy's in good shape, matching its best of the year and up nine points since late August. Thirty-seven percent call it a good time to buy things, up five points since late August. And 59 percent rate their own finances positively, up four points in the last week alone.

ELECTION -- While improving consumer sentiment is typically good news for an incumbent party a few weeks before Election Day, confidence is still only about average, and the economy as an election issue works better for the Democrats.

In a separate ABC/Post poll this week, 56 percent disapprove of way George W. Bush is handling the economy; Americans by a 17-point margin trust the Democrats over the Republicans to handle it; and the roughly one in four voters who call the economy the most important issue in their vote favor the Democratic candidate in their district by 24 points.

A chunk of the public, moreover, is even suspicious of the recent steep fall in gas prices. Thirty percent in the separate ABC/Post poll cite political factors as the reason for the decline; that includes 13 percent who think prices have gone down mainly because of Republican efforts to impact the election, another 12 percent who cite "the election" in general and five percent who cite political reasons in general.

TREND -- At -8, the CCI is up 11 points since the end of August, when it bottomed out at -19. It's just off its best of the year, -7 in March and April. Its all-time high was +38 in January 2000; its record low, -50 in February 1992. It's averaged -12 so far this year. Its average since December 1985 is -9.

GROUPS -- As usual, the index is higher in better-off groups. It's +41 among higher-income Americans while -57 among those with the lowest incomes, +5 among college graduates while -25 among those who haven't finished high school, -4 among whites but -36 among blacks and +4 among men while -20 among women.

At +3, the index continues to be strongest in the West. It's -3 in the South, -16 in the Midwest and -22 in the Northeast.

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

NATIONAL ECONOMY -- Forty-two percent of Americans rate the economy as excellent or good; it was 40 percent last week. The highest percentage of Americans rating the economy as excellent or good was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.