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POLL: Economic Expectations Now Their Lowest in 27 Years|
Seventy-Eight Percent of Americans Say the Economy's Getting Worse
Analysis by Scott F. Clement
July 15, 2008—
The day George W. Bush called a news conference intended to shore up economic confidence, a new ABC News survey finds pessimism about the economy's direction its highest in 27 years of polls.
Seventy-eight percent of Americans now say the economy's getting worse, the most in polls that first asked the question in March 1981. It was 77 percent in May, tying a record that had stood since fall 1990, in the midst of the 1990-91 recession.
Even as Bush spoke Tuesday morning, calling the economy basically sound, Fed Chairman Ben Bernanke gave a gloomier report to Congress, warning of inflation and a continued slowdown. Their appearances followed federal moves to rescue mortgage giants Fannie Mae and Freddie Mac and to seize the California lender IndyMac.
While those developments are new, sour consumer views aren't. Expectations have been bleak since late last year, with more than six in 10 Americans saying the economy's getting worse for nine months straight, an unprecedented streak of pessimism. Negative expectations are almost double their average, 40 percent, in polls since 1981.
On the flipside, optimism's been in a similar rut; for five months straight just 4 percent or fewer have said the economy's getting better.
The mortgage and banking sectors' troubles pile on top of the main irritant to consumer views, $4-plus gasoline. A separate ABC News/Washington Post poll this week found that just two in 10 Americans rate themselves as "very secure" financially, two-thirds report at least some stress as a result of their financial situation and for one in four it's "major" stress.
INDEX Separately, ABC's Consumer Comfort Index, based on views of current economic conditions (rather than expectations), stands at -41 on its scale of +100 to -100, up from its record low, -51, in late May, but stuck at or below -40 for 13 consecutive weeks. That compares to a 22-year average for the index of -10.
The index is based on current ratings of the economy, buying climate and personal finances. Only 14 percent rate the national economy positively, and it's been at or below 15 percent for 14 weeks straight, the longest period since a year-long stretch following the 1990-91 recession.
Twenty-three percent rate the buying climate positively, below 25 percent for 14 weeks and just 4 points off the all-time low hit twice in May.
Fifty-two percent rate their personal finances positively, historically the CCI's strongest component. It's down 6 points on the year, and 5 points below the long-term average.
TREND The CCI dropped a remarkable 31 points from the start of the year to a record low, -51, in late May; since then it's crept up but failed to break out of the -40s. It's still a far cry from its average, -10, much less its high, +38 in January 2000.
GROUPS As usual the CCI is higher in better-off groups, though it's negative across the board. It's -4 among higher-income Americans while -74 among those with the lowest incomes, -34 among those who've been to college while -66 among high-school dropouts, -38 among whites but -68 among blacks.
Regional differences are stark: The CCI is best in the West, -27, and worst in the Northeast, -52. In the Midwest it's -42, in the South, -43
And sharp partisan differences remain: The index is -18 among Republicans, but -39 among independents and -55 among Democrats.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY Fourteen percent of Americans rate the economy as excellent or good; it was 15 percent last week. The highest was 80 percent on Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
PERSONAL FINANCES Fifty-two percent say their own finances are excellent or good; it was 51 percent last week. The best was 70 percent, last reached in January 2000. The worst was 72 percent on March 14, 1993.
BUYING CLIMATE Twenty-three percent say it's an excellent or good time to buy things, the same as last week. The best was 57 percent on Jan. 16, 2000; the worst, 19 percent, May 11 and 18 this year.
METHODOLOGY Interviews for the ABC News Consumer Comfort Index are reported in a four-week rolling average. This week's results are based on telephone interviews among a random national sample of 1,000 adults in the four weeks ending July 13, 2008. The results have a 3-point error margin. The expectations question was asked of 500 respondents June 29-July 13, 2008; that result has a 4.5-point error margin. Field work by ICR-International Communications Research of Media, Pa.
The index is derived by subtracting the negative response to each index question from the positive response to that question. The three resulting numbers are 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.