Poll: Consumer Confidence Plunges
N E W Y O R K, Jan. 22 -- Recording one of its steepest drops in 17 years of weekly polls, consumer confidence nose-dived this week to its lowest level since December 1993.
The ABCNEWS/Money magazine Consumer Comfort Index, based on public views of current economic conditions, plunged six points to -27 on its scale of +100 to -100. A drop this big is extraordinarily rare; it's happened only six times in nearly 900 weeks of continuous polling. Four of them have happened since 2001; the other two in 1990.
All three measures in the ABC/Money index sustained hits:
The number of Americans who say the national economy is in good shape — just 24 percent — has lost five points in the last month to reach its lowest since December 1993.
The number rating their own finances positively — 52 percent — has dropped five points in two weeks to match its lowest since August 1995.
The number who call it a good time to buy things — just 34 percent — has fallen seven points since last month to its lowest since January 1996. This measure can be critical, because consumer spending accounts for two-thirds of the nation's economic activity.
A variety of factors are likely at play. Consumer confidence is quite vulnerable to oil and gasoline prices, and oil prices have risen to a two-year high. An ABCNEWS/Washington Post poll today finds that for the first time in his presidency, a majority of Americans, 53 percent, disapprove of President Bush's handling of the economy, up 10 points since he announced his stimulus package. Six in 10 think his proposed tax cuts favor the rich, and most prefer to see more spending on domestic programs, or a reduction in the federal deficit, rather than a tax cut.
EXPECTATIONS — As bleak as things look today, Americans by more than 2-1 expect worse. Forty-three percent say the economy's getting worse, while only 19 percent think it's getting better. Thirty-seven percent say it's holding steady.
TREND — While it's down sharply, consumer confidence is far from its worst. The ABC/Money index has been as low as -50 in February 1992, and averaged just -44 in 1992, its worst year on record. Its best annual average was +29 in 2000; last year the index averaged -11, its worst since 1996. Its lifetime average since December 1985 is -9.
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