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Consumer Comfort Hits Two-Year Low

The holiday spirit has not yet seized consumers. While many stores were full on Black Friday, the economic outlook is bleak and assessment of current conditions is as negative as it has been in more than two years.

In last week's report, economic pessimism hit its highest level in 17 years, and now, this week's Washington Post-ABC News Consumer Comfort Index (CCI) has dipped to its lowest point since October 2005.

At -21, the CCI reflects consumers' increasingly negative views of the buying climate, their personal finances and the state of the national economy. These are the three compoents of the Post-ABC index, and compared with sentiment heading into the holiday season last year, Americans are significantly less positive about each. Two-thirds now rate the national economy negatively and nearly seven in 10 call it a bad time to make purchases. A majority, 55 percent, rate their own finances positively, but this too is down substantionally from a year ago.

Consumers' concerns mirror the dour outlook from the Federal Reserve. Negative economic news - oil prices approaching $100 a barrel and pump prices again topping $3.00 per gallon, housing prices on the decline and a weak dollar - has precipitated similar pessimism even from Wall Street.

Amid all this gloom, an improved outlook among consumers may take more holiday cheer than even Santa Claus can handle.

The Washington Post-ABC News CCI is a measure of consumer confidence based on responses to economic questions on the state of the national economy, the state of consumers' own personal finances and whether or not it is a good time to buy. The index is a rolling average based on telephone interviews with 1,000 adults conducted over a four-week period ending Nov. 25. The results have a margin of sampling error of plus or minus three percentage points.

More information on the CCI can be found here.

By Jennifer Agiesta  |  November 27, 2007; 5:53 PM ET
Categories:  Post-ABC Consumer Comfort Index  
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Comments

I find it laughable that WaPo is analyzing this for us. We should be analyzing this for them....but then they are not listening. They still report daily that the economy is mostly ok. That the Fed is making adjustments. That the stock market is suffering ...but look at the rebounds. That perception is coming from a mindset that believes that if the rich are doing ok, we all are.
The items that they point out in this article....its gas prices, etc. It is so much more than all that. It is flat wages and lessor paying jobs for those who lose their job. It is a lack of insurance or the staggering cost of maintaining insurance coverage. It is the certainty that we the middle class will be harnassed with the bill when the enormous debt the war is racking up finally starts being paid back to China. It is the sinking feeling that none of what we want is being legislated....that we are not represented and that the next terrible decision made by either the president or congress will serve to make things even harder. Who's security do analysts think we are concerned with?

Posted by: Kevin Morgan | November 27, 2007 6:41 PM | Report abuse

The average person does not judge how well they are doing economically by the daily Wall Street numbers. They judge by what is actually coming out of their pocket, their take home salaries and their the dollars actual buying power. Gas is up, groceries are up, home heating costs are skyrocketing, health insurance is flat out UNAFFORDABLE. When people have to take a second job just to pay for food, gas and insurance, we are in trouble.

Many people are simply living on credit cards, week to week paychecks and a prayer. That doesn't spell good economy to the average working class American.

Posted by: Cheryl | December 1, 2007 8:45 AM | Report abuse

The Federal Reserve is looking out for the rich and with all the foreign countries buying US companies the more the American workers will make less. Bottom line the middle class is being eliminated for wages continue to decrease while the resources to survive on continue rise (cost fuel,milk, groceries,etc..) We are living paycheck to paycheck while the Feds continue to protect the large corporations with interest cuts and fail to protect the value of the US $$.

Posted by: junebug9257 | December 2, 2007 12:26 PM | Report abuse

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Posted by: votenic | December 3, 2007 12:53 PM | Report abuse

This is so sad. For many Americans the Holiday season is the best time of year to shop. People go to the mall with friends and share in the holiday spirit. It is hard to believe that politics can effect the moods of these consumers. I wish we lived in a perfect world where every one could just enjoy the holidays with family and friends, but the sad truth is we don't.

Posted by: lauralion | December 5, 2007 7:48 PM | Report abuse

Posted by: hand | December 22, 2007 7:54 PM | Report abuse

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