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Thursday, March 28, 2024

ABC Consumer Comfort Index Drops To -50, New 2010 Low And Just Four Point Above All Time Record Low

Courtesy of Tyler Durden

Not a good day for consumer confidence. First, the vastly irrelevant Conference Board crashed and burned earlier, dropping nearly 10 points below consensus expectations after its only driver, the market, turned down in January, showing just how unreliable this index is, and now the ABC Consumer Comfort came in at the “dreaded” -50 level (and don’t get us started on UMich, whose entire rolodex consists of the home phone numbers of Blankfein, Dimon and Pandit). The is the lowest reading for the index since -51 recorded in October 2009, and just 4 points above its 24 year record low. Of the three main readings in the index, the Personal Finance component declined even as Buying Conditions and the National Economy both stayed at depressed levels. Notably, the racial gap among the respondents who view the economy as being in total shambles has all but disappeared, even as increasingly more Democrats perceive the economy as worse off than Republicans. Funny, isn’t the president a Democrat?

From the press release:

The ABC News Consumer Comfort Index hit the dreaded -50 mark for the first time in nearly four months this week, a mere four points from its record low in 24 years of weekly polls. While the change isn’t statistically significant from recent levels, -50 is a psychological barrier – and not a happy one – for the index. This marks just the 25th time in 1,260 weekly polls the CCI has been this low. Remarkably, 23 of them have occurred in the past 16 months. Figure on a scale of 100 to -100, the index has averaged -48 so far this year, matching its 2009 average, its worst full year on record. Compare those to its long-term average, -13, much less its best year, +29 in 2000, and its best week, +38 in January that year. Those days seem far away.

The federal government has reported seasonally adjusted increases in initial jobless claims (up 31,000 to 473,000 last week) and wholesale prices (up 1.4 percent in January). Neither helps.

Another consumer confidence measure, by the Conference Board, startled Wall Street with a drop today, but it’s done monthly rather than weekly. The ABC CCI hit a short-term peaklet, -41, the first week of January, then sharply surrendered ground.

Drilling down on the various index constituents and stratifications:

CURRENT INDEX – The index is based on Americans’ ratings of the national economy, their personal finances and the buying climate. As has been true since early 2008, the current economy gets the most negative assessment of the three: Only 8 percent rate it positively, 30 points below the long-term average and in single digits for 13 weeks straight. Just 24 percent call it a good time to spend money, 13 points worse than the long-term average. And 43 percent rate their personal finances positively, 14 points below its long-term average. Half or more have rated their own finances negatively for 88 of the last 94 weeks.


GROUPS – As usual, the index is higher among better-off Americans, but it’s been negative across all groups for 52 weeks straight, the longest such run in available data since 1990. It’s -4 among those with the highest incomes, -65 among those with the lowest; -40 among people who’ve attended college vs. -66 among those who never finished high school; -44 among homeowners but -67 among renters (their lowest since October); and -43 among men vs. -55 among women (tied with last week for their lowest since November).


The usual racial gap has been smaller recently and essentially disappeared this week, with the index at -49 among whites and -48 among blacks; long-term, by contrast, blacks have been less positive by an average 28 points.


The Republican-Democratic gap likewise has been narrower than usual this year, but widened in the last two weeks; the index now is -39 among Republicans vs. -56 among Democrats and -50 among independents. The 17-point gap this week compares with an average 6-point gap this year and 18 points last year, vs. 41 points in 2008 and 32 points long-term.

Full press release.

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