POLL: Drop in Consumer Confidence Now Its Second-Steepest on Record
Fall in confidence is surpassed only during the 1990-91 recession.
Feb. 12, 2008 — -- Consumer confidence fell again this week, making its second-steepest drop on record in the 22-year weekly ABC News index -- a drop surpassed only during the 1990-91 recession.
Down 4 points this week, 6 points last week and a net 17 points this year, the Consumer Comfort Index now stands at -37 on its scale of +100 to -100, its lowest since November 1993. It's fallen this far this fast once before, in October 1990, as the 1990-91 recession gathered steam.
Confidence has been falling in lockstep with other negative economic news. A downturn in the service sector of the economy for the first time since 2003 sent stocks reeling last week, while the credit and housing crises continue apace. In a danger sign, this week less than half of Americans rate their own finances positively, a first since 1993.
The CCI has fallen by a significant margin in four out of the last five weeks, a sustained drop that also has been matched just once previously, when it fell significantly for four weeks straight in September to October 1990.
Last week's 6-point drop was unusual; the index has lost 6 or more points in a single week just 11 times in 22 years of weekly surveys. And its drop recalls the index's 13-points decline in the month leading up to the 1990-91 recession, and its 14-point drop in the month leading up the recession in 2001.
INDEX – The index is based on Americans' ratings of their current finances, the national economy and the buying climate. This week 49 percent rate their personal finances positively, less than half for the first time since November 1993, down 9 points this year and 8 points off the long-term average.
Less, 26 percent, call this a good time to buy things, the same as last week at a level not previously seen since July 1993. Positive ratings of the buying climate are down 5 points since the start of the year and 12 points below the long-term average.
Fewer still, 20 percent, rate the national economy positively, down 11 points this year and down 7 points in the last two weeks. It's 20 points below its long-term average, 40 percent, and again hasn't been this low since November 1993.
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