The grip of decades-high inflation pushed Americans’ ratings of the buying climate to a nine-year low this week and assessments of the national economy to their largest single-week drop since the onset of the pandemic, leaving the overall Consumer Comfort Index its lowest since June 2020.
Economic outlooks, for their part, turned acutely negative, deepening already pessimistic views. For the first time since May 2020, a majority now thinks the national economy is getting worse.
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Americans’ assessments of whether or not it’s a good time to buy things sustained their largest one-week drop in 36 years of data last week. This week they fell further, down an additional 3.7 points to a low since September 2012. At 25.8 on its 0-100 scale, the CCI’s buying climate subindex has lost 18.4 points in five weeks and 24.9 points from its nearest peak in June, its pandemic gains eliminated.
Present-day ratings of the national economy also worsened, down 4.9 points this week in their largest single-week drop since April 2020. The subindex is down 13.1 points since mid-December and 25.3 points from its pandemic peak in late August to a 1.5-year low of 29.5.
Personal finance ratings are steady by comparison, down a nonsignificant 0.5 points this week to a two-month low of 61.3. This subindex has fallen 2.8 points in the past month and 9.7 points from its pandemic peak in late August, while still 8.5 points better than its pandemic low in May 2020.
Based on these gauges, the current-sentiment CCI is at a 1.5-year low of 38.9, down 3.0 points this week and 11.4 points in five weeks – its largest backslide since May 2020. The index has fallen 19.3 points from its pandemic peak a little over four months ago, with more than 80 percent of its pandemic gains reversed.
Expectations also are souring. Fifty-six percent think the national economy is getting worse, up 6 percentage points in a month and 18 points since mid-November to the most since May 2020. Far fewer, 16 percent, say the economy is getting better, down 7 points since December and 22 points since August to match its lowest since November 2011. About a quarter say it’s staying the same.
The current better-worse margin of -40 points nearly matches the -41- and -42-point differences in April and May 2020, marking a sharp reversal from last spring and summer, when optimism outpaced pessimism by 2 to 6 points. It compares with an average -17-point margin in data since March 1986.
