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Entries in CCI (7)

Tuesday
Feb082011

Rising Gas Prices Slam Consumer Sentiment

Photo Courtesy - Getty Images(NEW YORK) -- Soaring gasoline prices slammed consumer sentiment into reverse this week, threatening the slow recovery in economic views that’s been under way.

With gas now at a record high for February in Energy Department data dating back to 1990, the weekly Consumer Comfort Index (CCI) dropped by an unusually steep 5 points to -46 on its scale of -100 to +100. It’s dropped that far only 36 times in more than 1,300 weeks of ongoing polling since late 1985; this shift erases an equally unusual 5-point gain in early January.

It’s likely no coincidence that the change in sentiment follows the federal government’s report Monday that gas has jumped to an average $3.13 a gallon, up steadily from $2.74 six months ago, $2.65 a year ago and $1.89 two years ago this month.

The portent is not a good one. Gas prices tend to drop in winter, when demand is down, and rise in summer, when more Americans hit the road. Gas last approached this wintertime level in February 2008 -- on its way to a record high of $4.11 the following July.

A repeat could be devastating to consumer sentiment.

Although the CCI and gas prices don’t always move in tandem, they’ve correlated significantly -- meaning that as gas prices go up, confidence tends to decline. And that relationship strengthens when fuel prices are rising: From February 2007 to July 2008, as gas soared from $2.19 to $4.11, the CCI tanked from  -1 to -41.

That relationship suggests that confidence would be in a better place now were gas prices not rising -- with this week’s CCI a warning siren for the slow, tentative recovery of late.

Copyright 2011 ABC News Radio 

Tuesday
Feb012011

Consumer Sentiment: Struggling Forward

Photo Courtesy - Getty Images(NEW YORK) -- Consumer views of current economic conditions resumed their struggle forward this week, with the weekly Consumer Comfort Index inching back near the high end of its recent range.

The index stands at -41 on its scale of -100 to +100, far below its 25-year average, -14, and indeed still below -40, where it’s been mired for a record 146 weeks. But, despite ups and downs, there are several indications of gradual advance:

    * The CCI was below -41 for all of 2009 and reached -41 just three times in 2010 -- but it’s already matched or exceeded this level twice in just the first month of 2011.

    * While the index averaged -48 in 2009 (its lowest on record), it advanced slightly to -46 in 2010, and so far this year has averaged -43 -- small progress, but progress nonetheless.

    * Since hitting its record low, -54, in December 2008, the CCI has correlated with the passage of time at a robust .61; as the weeks have passed, it’s slowly gained.

    * Last month’s economic expectations measure -- maintained separately from the current-sentiment CCI -- was its least pessimistic in more than eight years.

    * The index correlates with the Dow Jones Industrial Average at a remarkable .83 (after detrending for time) -- and the Dow Tuesday closed above 12,000 for the first time since June 2008.

The CCI, produced by Langer Research Associates, is based on Americans’ ratings of their personal finances, the buying climate and the national economy. Forty-six percent now rate their finances positively, matching its average last year, and 28 percent call it a good time to buy things, a scant 2 points above its 2010 average. While just 14 percent rate the national economy positively, that’s 4 points better than its 2010 average, and has been in double digits for 12 weeks straight, matching the longest run in double digits (set last spring) since fall 2008.

Even with the general upward trend, there could be a long road ahead. After the last major recession in 1991-92, it took the CCI more three and a half years to reach its pre-recession levels. Now, given how low it’s been and how slowly it’s advancing, it would take the CCI 10 years at this pace to regain its current long-term average.

Copyright 2011 ABC News Radio 

Tuesday
Jan112011

Consumer Confidence Jumps to Two-and-a-Half-Year High

Photo Courtesy - Getty Images(NEW YORK) -- Consumer confidence jumped to its highest level in more than two and a half years this week, led by improved ratings of the buying climate and national economy.

The Consumer Comfort Index advanced by five points, a sharp one-week gain that’s been matched or exceeded only 24 times in more than 1,300 weeks of ongoing polling since late 1985. It follows a mid-December drop in economic pessimism, measured separately, to a six-year low.

Shifts this big do not always mean continued improvements in consumer sentiment down the road. But one particular data point offers hope: A five-point jump in the CCI in March 1993 marked the start of the index’s climb out of the 1990-91 recession and its hangover. Still, it was a long road; the CCI didn’t regain its pre-recession level until November 1994.

This advance follows last week’s report that unemployment fell to 9.4 percent in December, its lowest since July 2009. That in turn followed a dip in weekly initial unemployment claims for the last week of December to their lowest since July 2008. (Last week’s report, though, worsened.) As noted last week, the CCI correlates closely with unemployment as well as with a variety of other indicators. (One, the Dow Jones Industrial Average, rose 11 percent last year.)

This week’s jump in confidence occurred chiefly among groups that often are hit hardest by unemployment. The CCI reached its best in more than two and a half years among adults who are under age 34, singles and Democrats, and also has risen among unmarried adults, renters and low-earners. It’s matched a two-and-a-half-year high among women as well.

The CCI, produced by Langer Research Associates, is based on Americans’ ratings of the current national economy, the buying climate and their personal finances.

Copyright 2011 ABC News Radio

Tuesday
Jan042011

Consumer Comfort Index Rings in the Old -- But with Brighter Hopes Ahead

Photo Courtesy - Getty Images(NEW YORK) -- Consumer views of current economic conditions start 2011 about as poor as they were across troubled 2010 -- but with tantalizing signs of potential gains ahead.

First the bad part: The ongoing Consumer Comfort Index stands at -45 on its scale of -100 to +100, its second-worst start to a new year in 25 years of weekly polling. That’s four points higher than at the beginning of 2009, but four points lower than in the first week of 2010. The CCI averaged -46 last year, and this week marks the 142nd week in a row it hasn’t exceeded -40, a record by far.

Yet other trends offer grounds for hope. The Labor Department last week said weekly initial unemployment claims fell below 400,000 for the first time since July 2008 -- and historically the CCI has closely correlated with this indicator. Moreover, the Dow Jones Industrial Average jumped 93 points yesterday to its highest close since August 2008. The Dow and the CCI also are aligned closely, with a monthly correlation of .83.

There are more reasons to think better things may be in store. Expectations for the economy’s future, as apart from views of current conditions, improved last month. And as noted last week, 2010 was the first year since 2006 that the CCI improved upon its previous year’s annual average. That conjures images of its recovery from the last sharp downturn; after bottoming out at an annual average of -44 in 1992, the index improved to -37 in 1993 -- and then grew steadily until the next (milder) recession in 2001.

The CCI, produced by Langer Research Associates, is based on Americans’ ratings of their current finances, the national economy, and the buying climate. This week just 11 percent rate the national economy positively, 26 percent call it a good time to buy things and 46 percent say their personal finances are in good shape, fewer than a majority for a record 52nd week straight.

Copyright 2011 ABC News Radio

Tuesday
Dec212010

Consumer Confidence: Cue the Holiday Cheer

Photo Courtesy - Getty Images(WASHINGTON) -- A bit of holiday cheer arrived on cue this week: Boosted by a brightening outlook among Republicans, consumer confidence advanced to match its yearlong high.

The result follows last week's decline in economic pessimism, which fell to its lowest in six years. While it's hardly time to break out the bubbly, together the two mark the first better-than-bad results in consumer sentiment in a long while.

The ABC News Consumer Comfort Index (CCI), produced for ABC News by Langer Research Associates, has risen four points in the last two weeks to -41 on its scale of +100 to -100, five points above its 2010 average and nine points above its low for the year, last seen in early August. Nonetheless, the CCI is still far below its 25-year average, -14. And previous rallies have faltered: The index hasn’t risen above -40 since April 2008.

This week's results mark growing gaps in consumer sentiment among income and partisan groups, as well as by gender -- including a surge among Republicans celebrating their success in the 2010 Midterm Elections. The CCI is now -27 among Republicans, a two-year high -- up a dramatic 21 points since early October, up 11 points in three weeks, and 14 points above its 2010 average.

Among people with household incomes of more than $100,000 a year, the CCI is +11, staying in the black for the fourth week in a row and 15 points above this year's average.

The CCI stands at -27 among men -- nearly a three-year high and 13 points above the 2010 average -- while among women it's -55, its lowest since April. Although the index typically is higher among men, the current 28-point gap is its sharpest in three and a half years.

This gender difference likely is partially attributable to the rise in confidence among Republicans and the wealthy, two disproportionately male groups -- perhaps both celebrating the rising stock market and the continuation of Bush-era tax breaks for all income levels, as well as the GOP's re-taking control of the House of Representatives.

Democrats and those who make less than $50,000 a year are far less merry, with CCI readings of -49 and -62, respectively.

The index is based on Americans' views of the national economy, the buying climate, and their personal finances, and while none of the individual stats are particularly good, all have been worse in the recent past. Positive ratings of the economy and personal finances held steady this week, at 12 percent and 48 percent, respectively. Ratings of the buying climate improved slightly, with 28 percent calling it a good time to buy, a 10-week high -- just in time for the holidays.

Copyright 2010 ABC News Radio

Tuesday
Oct262010

Consumer Research: Halloween Horror Show for Dems

Photo Courtesy - ABC News(NEW YORK) -- With five days until Halloween and seven days before the election, consumer confidence is looking like a horror show for the political party in power.

The ABC News Consumer Comfort Index stands at -47 on its scale from +100 to -100, seven points from its low in nearly 25 years of weekly polls. It’s been this bad just twice in the week before an election: in 2008 and 1992, both years the Republicans were turfed out of the White House.

Now it looks like the incumbent Democrats’ turn to suffer. As in the past, economic discontent is fueling broad dissatisfaction with the status quo, and it’s aimed particularly at the party calling the shots in Washington.

Negative economic sentiment is further intensified by the depth and breadth of the downturn.

The CCI is based on Americans’ views of the economy, their personal finances and the buying climate. A whopping 92 percent rate the economy negatively, but majorities also say their own finances are hurting (53 percent), and they call it a bad time to buy (75 percent) -- and have all year.

Leading up to the election, the lack of a partisan gap in consumer attitudes is notable. This week, the CCI is -39 among Democrats and -44 among Republicans. On average, by contrast, the index among Republicans has been 31 points more positive than among Democrats in available data since 1990.

The usual gap has steadily narrowed since the recession began, and for the past two weeks Democrats have shown greater confidence than Republicans, albeit not significantly so. This flip has happened only 19 times in more than 1,000 weeks of polling.

Yet negativity among Republicans isn’t Democratic candidates’ chief problem. That lies with crucial swing-voting independents, among whom the CCI’s a dismal -51, worse than it is even among Republicans – and a number that may be the scariest yet for the president and his party.

Copyright 2010 ABC News Radio

Tuesday
Oct192010

Americans' Ratings of Economy Show Gloom 

Photo Courtesy - ABC News(NEW YORK) -- Two weeks before Election Day, the economic shot clock is running out for the Democrats.

With economic discontent the central motivator in the upcoming midterms, the ABC News Consumer Comfort Index this week stands at -46 on its scale of +100 to -100, tying its average for this year and a mere two points from its worst full year on record, 2009, in weekly polling since late 1985.

Neither is the outlook any brighter.  In a separate monthly measure, just 23 percent of Americans say the economy is getting better, while 34 percent say that it is getting worse.  The rest say it’s staying the same -- which is to say, still terrible.  Economic pessimists have outnumbered optimists in each of the last five months, in all but one month this year, and in all but three months since Barack Obama won the presidency two years ago.

It could be worse, and it has been before.  At this time in 2008, with the economy falling into the shaft, a record 82 percent of Americans said it was getting worse; it’s less than half that now.

Pessimists outnumbered optimists by an average of 37 points from March 2007 to March 2009; the gap’s been much slighter, an average of eight points, since then.

Optimism is a good predictor of future consumer confidence, albeit with some periods of discontinuity.  Since 2001, the gap between positive and negative expectations correlates at .68 with confidence three months later.  That suggests current sentiment, as measured by the CCI, is likely not to pick up until consumers become more optimistic about the future.

The CCI, produced for ABC News by Langer Research Associates, comprises Americans’ ratings of the national economy, the current buying climate and their personal finances.  This week, 92 percent give the national economy a negative rating, 72 percent call it a bad time to spend money and 55 percent say their own finances are hurting.

Copyright 2010 ABC News Radio







ABC News Radio