ABC/Washington Post Consumer Comfort Index tumbles to -20

 @ibtimes
on August 21 2007 6:40 PM

A confluence of negative factors struck a blow to the confidence of American consumers in the latest week, with a weekly survey registering its biggest decline ever.

The ABC News/Washington Post Consumer Comfort Index tanked to -20 in the latest week from -11 in the previous period. It was the first time the index fell 9 points in a week since it was launched in 1985.

The measure ranges from -100 to +100 and its 2007 average is -7.

The decline is broadly based among population groups, and there seems not to be a single negative event to blame, but a confluence, the news outlets said in a statement.

They blamed the stock market's fall, troubled housing and credit markets, the (Federal Reserve's) expressions of concern about an economic downturn, the cumulative effect of high gasoline prices during the summer driving months and a public broadly dispirited over the course of national events, driven by the unpopular war in Iraq.

In the ABC/Post survey, all three components were down as Americans' positive views on the national economy fell 5 percentage points to 32 percent; views on their personal finances lost 5 percentage points to 53 percent and views on the buying climate fell 4 percentage points to 35 percent.

Confidence measures are generally viewed as a barometer of consumer spending, which accounts for two-thirds of the U.S. economy. However, economists note that consumers do not always act in accordance with their statements to surveys.

The ABC/Washington Post consumer confidence survey was based on a sample of about 1,000 interviews conducted in the four weeks ending Aug. 19 and has a margin of error of plus or minus 3 percentage points.

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