Consumer Confidence Hovers in Middle Zone

Consumer confidence hovered this week in the narrow range it's occupied for the past month and a half, ever since a sturdy gain in May gave way to gas-price pressures. But there's a slight glimmer of greater optimism: One in five Americans say the economy's improving, up from a recent low of 14 percent in April.

The ABC News/Washington Post Consumer Comfort Index stands at -9 on its scale of +100 to -100, exactly matching its average since this weekly survey began in December 1985. It's remained between -9 and -11 since June 12, after rising from -19, its low for the year, on May 1.

Gasoline prices can be a significant factor in consumer confidence. After a steep boost of 10 cents a gallon last week, prices stabilized this week, down a penny, according to the U.S. Department of Energy's weekly survey. Other factors influence consumer views as well; real disposable personal income, for instance, has increased in three of the last four months, and unemployment is at its lowest rate in nearly four years.

Separately, the number of Americans who think the economy is improving has inched ahead, from 14 percent in May to 21 percent now. Views are hardly positive, though: About twice as many, 43 percent, still think the economy is getting worse.

The ABC/Post index is based on Americans' ratings of the national economy, the buying climate and their personal finances; expectations are measured separately from the index. This week 41 percent rate the economy positively, the most since Feb. 6. Fewer, 36 percent, call it a good time to buy things, but more, 59 percent, rate their finances positively. Each is near its 2005 and long-term averages.

TREND -- The index started the year at -9 and hit its 2005 peak, -7, on March 6, before dropping to its May 1 low. These compare to an all-time high of +38 in January 2000 and a low of -50 in February 1992.

GROUPS -- As usual, confidence is higher in better-off groups. The index is +34 among higher-income Americans while -47 among those with the lowest incomes, +10 among college graduates while -37 among those who haven't finished high school, -3 among whites but -50 among blacks and +8 among men while -25 among women.

In terms of expectations, economic pessimism has decreased among men since May (down 15 points), while it's virtually unchanged among women since that time.

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

NATIONAL ECONOMY -- Forty-one percent of Americans rate the economy as excellent or good; it was 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-nine percent say their own finances are excellent or good; last week it was 57 percent. 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, which is down from 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 July 17, 2005. The results have a three-point error margin. The expectations question was asked of 500 respondents July 6-17; 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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