Consumer Confidence Sinks to a 2006 Low

Consumer confidence drooped for the fifth week in a row this week, marking an eight-point decline during the past month and reaching a new low for 2006, according to the latest release of The Washington Post-ABC News Consumer Comfort survey.

Overall, the index is at -19, down from -17 last week and -11 at this point in April. This puts the confidence measure in sight of last fall's gloomy, post-Katrina numbers, when the index hit -23.

The new rating comes amidst continued concern about fuel prices: the average price of gas stands at $2.93 per gallon, according to an Energy Information Administration estimate released yesterday. A recent Post-ABC News poll found that nearly six in 10 Americans said gas price increases had caused at least some financial hardship for their households, with three in 10 reporting serious impact.

The previous two weeks were also difficult ones for Wall Street, with inflation fears driving down the major stock market indices.

Of the three components that make up the consumer comfort index -- ratings of respondents' personal finances, the national economy and the buying climate -- it is views of the national economic picture that have sagged the most. In the current survey, 33 percent of Americans rated the economy as "excellent" or "good," while 67 percent said it was "not so good" or "poor." This is a 6-point drop in positive ratings over the month.

Consumers don't seem to see relief on the horizon: in mid-May, 56 percent said the country's economy was getting worse, 29 percent saw no change, and a small minority -- 14 percent -- said it was getting better. This was the most pessimistic monthly reading since last October.

Next up for confidence watchers: Friday's release of an updated University of Michigan consumer sentiment number for May. Also on Friday, the Commerce Department will release April data on personal income and spending.

The Post-ABC News Consumer Comfort Index is computed as a rolling average based on telephone interviews with 1,000 randomly selected adults over the previous four-week period. Across its 20-year history the index -- which is measured on a scale of -100 to 100 -- has averaged -9, ranging from a high of 38 in Jan. 2000 to a low of -50 in Feb. 1992.

The latest index is based on interviews conducted through May 21. Margin of sampling error for the results of individual questions is plus or minus three percentage points. The item measuring the perceived direction of the economy is based on 500 interviews and is reported monthly. The margin of error for this result is plus or minus 4 points.