Americans don't have a lot of faith in the current economy, and they expect it to get worse.
A recent ABC News/Money magazine survey revealed that the confidence of American consumers has been flagging lately. We're just not buying things with the same gusto we had a few months ago.
According to the report, "[The] Consumer Comfort Index now stands at -22 on its scale of +100 to -100, down four points from last week, down nine points in three weeks, and down 19 points since reaching its recent high of -3 in mid-January."
Among contributing factors suggested were the recent surge in gas prices, continued weakness on the job front, and a somewhat sluggish stock market.
Here are some specific findings of the survey:
- Some 29% of respondents say the economy is in good shape. This is down 15 points over the last two months and well south of the long-term average of 40%.
- 35% said that it's a good time to buy things. This is the lowest percentage since May.
- 53% reported that their personal finances were OK (though it's possible that many of these folks may be deluding themselves).
- Only 23% said that the economy is getting better, while 42% see things getting worse.
- The rich are more content -- and significantly so. Higher-income respondents rated a +8 on the index, while the lowest-income group scored a -68. College graduates scored -7, while high school dropouts were considerably less confident at -53.
- Republicans scored a +31 on the index, compared to -43 for Democrats and -31 for independents.
The report also noted that "At -22, the ABC/Money index is 13 points below its long-term average, -9. It inched above average at the start of the year before [a] Feb. 15 plunge. (The last two times the index fell so steeply, in 1990 and 2001, recessions followed.) The current rating is far from the record high, +38 in January 2000 and still well above its all-time low, -50 in February 1992."
These results carry several implications for interested Fools. For starters, prolonged low confidence among consumers can hurt the companies we invest in. Makers and sellers of big-ticket discretionary-purchase items such as cars and washing machines may suffer if consumers put off purchases until rosier times. Such firms might include Ford
Longtime Fool contributor Selena Maranjian owns share of Pfizer.