Confidence Up Over a Month

Consumer confidence has advanced slowly but steadily in recent weeks, this week reaching its best level in the last three and a half months.

How it ultimately plays into Christmas sales is unclear, but there's little doubt Christmas in October would have looked a lot worse. The ABC News/Washington Post Consumer Comfort Index now stands at -13 on its scale of +100 to -100, up five points in the past month and up 10 points from its post-Katrina low to its best since Aug. 28.

At -13, the index now matches its average for 2005, below both its high for the year, -7, and its long-term average of -9 in weekly polls since late 1985. It averaged a similar -11 in 2004, up from -19 in 2003.

With the economy continuing to show signs of strength, the Federal Reserve raised interest rates a quarter-point today, noting, "Despite elevated energy prices and hurricane-related disruptions, the expansion in economic activity appears solid."

The Commerce Department reported today that retail sales rose by a moderate 0.3 percent last month, a bit weaker than the 0.4 percent analysts expected. Still, some economists saw it as a hopeful sign for retailers, who have reported mixed results in the critical holiday shopping season so far.

INDEX -- The weekly ABC/Post index is based on Americans' ratings of the current national economy, the buying climate and their personal finances. This week 37 percent rate the economy positively, 36 percent call it a good time to buy things and 57 percent say their personal finances are in good shape, each at or near its average for the year.

TREND -- The index's current -13 compares with an all-time high of +38 in January 2000 and an all-time low of -50 in February 1992. It was -6 a year ago.

GROUPS -- As usual, confidence is stronger among better-off Americans. The index is +50 among higher-income people; -63 among those with the lowest incomes; +2 among college graduates; -58 among those who haven't finished high school; -9 among whites but -39 among blacks, and -2 among men but -23 among women.

As has been the case all year, the index is far higher among Republicans (+32) than among independents (-24) or Democrats (-35).

Regionally, the index this week is once again best in the West (-3), compared with -11 in the South, -19 in Northeast and -20 in the Midwest.

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

NATIONAL ECONOMY -- Thirty-seven 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 7 percent in late 1991 and early 1992.

PERSONAL FINANCES -- Fifty-seven percent say their own finances are excellent or good; it was 56 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-six percent say it's an excellent or good time to buy things; it was 37 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 Dec. 11, 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.

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