Consumer Confidence Up in Autumn

Consumer pessimism has eased this fall as ratings of current economic conditions have improved, two positive trends in the ups and downs of consumer confidence in 2005.

Though 47 percent of Americans say the economy is getting worse, that number has declined steadily the last three months after hitting a peak of 60 percent -- the most in more than 13 years -- in mid-September, shortly after Hurricane Katrina sent gas prices soaring.

Ratings of current conditions also are better: The ABC News/Washington Post Consumer Comfort Index, based on ratings of the current economy, personal finances, and the buying climate, has gained 10 points in a month and a half, from -21 on Oct. 30 to -11 today on its scale of +100 to -100.

The CCI is now very near its long-term average, -9, in weekly polls since late 1985, and also close to its average this year, -13. It ranged this year from a high of -7 to a low of -23.

EXPECTATIONS -- This survey measures economic expectations separately from its current conditions index. Just 18 percent say the economy is getting better, hardly a stirring result, and more than average say it's getting worse. Still, as noted, the number who say it's worsening has eased considerably since mid-September.

INDEX -- In the weekly CCI, 38 percent now rate the economy positively and 37 call it a good time to buy things; more, 59 percent, say their personal finances are in good shape. All three ratings are up about equally from Oct. 30.

GROUPS -- As usual, confidence is higher among better-off groups. It's +43 among higher-income Americans, but -62 among those with the lowest incomes; +3 among college graduates while -56 among those who haven't finished high school; -6 among whites but -38 among blacks; and -1 among men while -20 among women.

As has been the case all year, the index is far higher among Republicans (+36) than among independents (-28) or Democrats (-33). The gap in confidence between Democrats and Republicans continues to be wide, 69 points.

Regionally, the index this week continues to get better in the West, now +2, compared with -18 in the Northeast and Midwest, and -10 in the South.

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

NATIONAL ECONOMY -- Thirty-eight percent of Americans rate the economy as excellent or good; it was 37 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-nine 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-seven percent say it's an excellent or good time to buy things; up one point from a week ago. 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. 18, 2005. The results have a three-point error margin. The expectations question was asked of 500 respondents Dec. 7 to 18; that result has a 4.5-point margin of error. 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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