Confidence Ends Its Climb

After steadily inching up over the previous month, consumer confidence leveled off this week, even as gasoline prices settled to pre-hurricane levels.

The ABC News/Washington Post Consumer Comfort Index now stands at -19 on its scale of +100 to -100, ending a four week advance in which confidence in current economic conditions advanced from a two-year low of -23 after Hurricane Katrina to -17 last week. (Expectations, measured separately, were near a 13-year low at mid-month.)

The average price of gasoline peaked at $3.07 a gallon Sept. 5, after Katrina, and has subsided since. It's $2.60 in federal survey data this week, numerically below the immediate pre-Katrina level ($2.61) for the first time since the storm made landfall.

REGIONS -- There are sharper-than-usual regional differences in consumer views. With winter looming and home heating prices poised to rise, confidence is sagging particularly in East, where it's far below average. It's also lower than average for the year in the Midwest and South, but better than usual in the more temperate West.

INDEX -- The weekly ABC/Post index is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week 33 percent call it a good time to buy things, and the same number says the economy's in good shape. More, 56 percent, say their own finances are OK.

Each of these is two to four points off its 2005 average. The buying climate and national economy ratings are farther below their long-term averages since late 1985, by six and seven points, respectively. Personal finances are keeping the ship afloat.

TREND -- At -19, the index is a bit better than its low from the year, -23 Sept. 18, but below its 2005 average, -13, and its long-term average, -9.

The CCI's best of this year was -7 in March; it's battled gas prices ever since, dipping to -19 in May, fighting back to -7 in July and mid-August, then falling again, particularly after Katrina hit and gasoline soared. Most recently, as noted, confidence rose for four consecutive weeks as gas prices fell, before leveling off this week.

While it's been much better -- an all-time high of +38 in January 2000 -- the CCI also has been far worse, averaging -44 across 1992, including a record low -50 that February.

GROUPS -- As usual, the CCI is higher in better-off groups. It's +37 among higher-income Americans while -49 among those with the lowest incomes, -6 among college graduates while -37 among those who haven't finished high school and -16 among whites but -42 among blacks.

This week there's a much larger gender gap than usual. On average this year, men have been more confident than women by 17 points in the index. This week, the gap is 31 points: The CCI is -2 among men, -31 among women.

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

NATIONAL ECONOMY -- Thirty-three percent of Americans rate the economy as excellent or good, unchanged from 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 58 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-three percent say it's an excellent or good time to buy things, unchanged from 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 Oct. 23, 2005. The results have a three-point error margin. Field work was done 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 co-sponsor of this index at the start of this year. The survey methodology remains the same.

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