Confidence Holding, for Now

Consumer confidence remains near average as gas prices spiked this week to an all-time nominal high. But with gas prices up 10 cents in the past week alone the index bears watching in the weeks ahead.

The ABC News/Washington Post Consumer Comfort Index stands at -11 on its scale of +100 to -100, close to its average this year, -12. Last week, the index was -9, matching its long-term average in weekly surveys since December 1985.

Historically, the index is correlated with gasoline prices, and this week's U.S. Department of Energy survey shows the average cost of a gallon of regular unleaded at a record high, $2.33. The 10-cent weekly increase is the second largest recorded by the DOE since 1990. The last time gas prices increased 10 cents in a week, in May 2004, consumer confidence slipped significantly over the following month.

This time, however, there is some positive economic news offsetting the gas price increase, including a recent rise in personal income and the lowest unemployment rate in nearly four years.

The ABC/Post index is based on Americans' ratings of the national economy, the buying climate and their personal finances. This week, 40 percent say the economy's in good shape, while most, 57 percent, say their own finances are OK. Thirty-seven percent call it a good time to buy things. All items in the index are at or near their 2005 and long-term averages.

TREND -- At -11, the index is back to where it was two weeks ago, and somewhat closer to its best so far this year, -7 on March 6, than to its low of the year, -19 on May 1. The index reached an all-time high of +38 in January 2000 and a low of -50 in February 1992.

GROUPS -- Confidence as usual is stronger among better-off groups. It's +38 among higher-income Americans while -56 among those with the lowest incomes, +7 among college graduates while -47 among those who haven't finished high school, -6 among whites but -55 among blacks and +3 among men while -25 among women.

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

NATIONAL ECONOMY -- Forty percent of Americans rate the economy as excellent or good; it was also 40 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, unchanged from 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; it was 39 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 July 10, 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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