After improving slightly last week — perhaps part of a broader rally-'round effect — the ABCNEWS/Money index is unchanged this week, standing at -1 on its scale of +100 to -100. It was -4, its lowest since March 1997, the week before the attacks.
Confidence is not strong — the index is down very sharply from +23 at the beginning of the year. But it's also well above the levels associated with the last recession, in 1990-91. And it's grown no worse in the face of the Sept. 11 terrorist attacks and their aftermath.
The ABCNEWS/Money index combines public ratings of the economy, buying climate and personal finances. Today, 62 percent of Americans call their own finances excellent or good, unchanged from last week; 44 percent rate the economy positively, down two points; and 42 percent call it a good time to buy things, up two points.
This poll includes about 500 interviews conducted in the two weeks before the attacks and 500 the two weeks after, ending Sunday. Results from the latter interviews were slightly more positive than were those derived from the pre-attack interviews. Many other post-attack polls, by ABCNEWS and others, also show public ratings of the economy steady or slightly improved from their pre-Sept. 11 levels.
Positive Ratings of … |
| |
9/24/01 |
9/9/01 |
1/7/01 |
15-year average |
| National Economy |
44% |
43% |
71% |
42% |
| Buying Climate |
42% |
40% |
47% |
38% |
| Personal Finances |
62% |
61% |
66% |
57% |
|
|
Part of this seems to reflect an "optimism rally" within the public's broader closing of the ranks. This would explain why, somewhat counterintuitively, several post-attack polls have found an increase in the number of people saying they are satisfied with the way things are going in the country.
Also, two prominent economic events of the past week — layoffs and the declining stock market — historically have not had a reliable or lasting impact on consumer confidence. Layoffs, especially industry-specific ones, tend to affect too few people, as a percentage of the entire population, to influence confidence strongly. And while market declines may hurt, the vast majority of stockholders describe themselves as long-term investors who don't rely on the market for ready cash; that softens the blow. So does their experience with market gyrations, ups and downs alike.
What has affected confidence most strongly in the past are personal incomes, inflation and interest rates, none of which has worsened in the last two weeks. Coincidentally, the Census Bureau on Tuesday reported that median income remained at an all-time high last year, while the poverty rate was at an all-time low.
An ABCNEWS/Washington Post poll on Thursday asked whether people thought the economy was heading into a recession. Fifty-seven percent said yes. While hardly a positive rating, that compares to 53 percent in an ABCNEWS/Post poll just before the attacks, and 58 percent last March. Again, not better, but also no worse.
If the attacks tip the economy into recession as a result of decreased business activity, travel and the like, consumer confidence assuredly will follow. But, for the moment at least, confidence seems to be following the business cycle rather than leading it.
ABCNEWS/Money Index |
| Today |
- 1 |
| Last week |
- 1 |
| Sept. 9 |
- 4 |
| Jan.
7, 2001 |
+23 |
| 2001 Average |
+ 7 |
| Jan.
16, 2000 |
+ 38
Record high |
| 2000
average |
+ 29
Best full year |
| 1992
average |
-
44 Worst full year |
| Feb. 9, 1992 |
- 50 Record low |
| Average since 12/85 |
- 8 |
| |
A Closer Look
As usual, confidence is higher among better-off Americans. The index is +22 in higher-income households compared to -36 in the lowest, +13 among college graduates while -39 among high-school dropouts, +5 among whites but -34 among blacks and +4 among men while -5 among women..
Here's a closer look at the three components of the ABCNEWS/Money index:
NATIONAL ECONOMY — Forty-four percent of Americans rate the nation's economy as excellent or good, down two points from last week. The best was 80 percent Jan. 16, 2000. The worst was seven percent in late 1991 and early 1992.
PERSONAL FINANCES — Sixty-two percent rate their own finances as excellent or good, unchanged from last week. The best was 70 percent, set Aug. 30, 1998 and last matched in January 2000. The worst rating was 42 percent on March 14, 1993.
BUYING CLIMATE — Forty-two percent say it's an excellent or good time to buy things they want and need, up two points from last week. The best was 57 percent Jan. 16, 2000. The worst was 20 percent in fall 1990
Methodology
The ABCNEWS/Money magazine Consumer Comfort Index represents a rolling average based on telephone interviews with about 1,000 adults nationwide each month. This week's results are based on 1,009 interviews in the month ending Sept. 23 and have an error margin of plus or minus 3 percentage points. Fieldwork was conducted by ICR-International Communications Research of Media, Pa.
The ABCNEWS/Money index is derived as follows: The negative response to each index question is subtracted from the positive response to that question. The three resulting numbers are then 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.
Previous ABCNEWS polls can be found in our Poll Vault.
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