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Consumer Comfort Index in U.S. Holds Near Two-Month Low

February 17, 2011

Press Release

U.S. Consumer Comfort Index Rose to Minus 43.4 Last Week
Republicans’ Comfort Rises to Minus 32.9 from Minus 38
Democrats’ Comfort Rises to Minus 48.9 from Minus 51
Democrat-Republican Comfort Spread is Biggest since December

NEW YORK — Consumer confidence last week held near a two-month
low, and more Americans turned pessimistic on the outlook for
the economy as gasoline prices rose.

The Bloomberg Consumer Comfort Index, formerly the ABC News US
Weekly Consumer Comfort Index, was minus 43.4 in the period to
Feb. 13 compared with minus 46 the prior week. Twenty-nine
percent of those surveyed said the economy will worsen, the most
since November and up from 23 percent in early January, today’s
release said.

For full CCI results:

The highest gasoline prices in two years have pinched household
budgets and threaten to stem the rebound in consumer spending,
the biggest part of the economy, that began last year. At the
same time, a decrease in firings may help Americans overcome
concern their jobs are in jeopardy, easing some of the negative
effects from rising energy bills.

“Sentiment remains quite fragile,” said Joseph Brusuelas, a
senior economist at Bloomberg LP in New York. “Rising food and
fuel costs are likely offsetting improvement elsewhere in the
economy for households on fixed incomes and those whose wages
are not sufficient to keep up with the increase in the cost of

The minus 46 reading two weeks ago was the lowest since late
November. That week’s five-point drop was the biggest setback
since January 2010.

The average price of a gallon of regular gasoline at the pump
increased to $3.13 on Feb. 15, the highest since October 2008,
according to figures from AAA, the nation’s biggest motoring

Gasoline prices and the comfort index have moved in the same
direction 98 percent of the time since 2004, according to
calculations by Brusuelas. Changes in the four-week average of
claims for jobless benefits have been in sync with the comfort
gauge about 72 percent of the time.

More Americans filed applications for unemployment insurance
payments last week, figures from the Labor Department showed
today. The number of claims increased to 410,000 from 385,000
the prior week.

Another report from the Labor Department showed consumer prices
rose 0.4 percent in January, propelled by costs of food and
fuel. Excluding food and fuel, the so-called core gauge rose 0.2
percent from the prior month.

The consumer comfort survey also showed registered Republican
voters have gained confidence over the past two months at the
expense of Democrats.

The index for Republicans stood at minus 32.9 last week, up from
minus 38 the week before. For Democrats, it was minus 48.9, up
from minus 51. The 16-point difference last week was the biggest
since mid-December. The spread has averaged about 31 points in
favor of Republicans since this index’s inception in 1990.

The biggest political gap on record, 90 points, was in July
2004, when Republicans were optimistic and Democrats were
pessimistic. Since then, Republicans have turned more
pessimistic, narrowing the difference.

The mood among Republicans turned more dour than that of
Democrats in December 2009 for the first time in 13 years. The
last time Democrats were optimistic overall was in July 2001.
Since December 2008, the month after Barack Obama was elected
president, the gap has not exceeded 31 points.

Income plays a central role in shaping respondents’ views, the
report showed. The index for Americans earning less than $15,000
a year was at minus 76.6 last week, compared with minus 79 the
week before. For those making more than $100,000, the index fell
to minus 4.6 from minus 4.

The Bloomberg Consumer Comfort Index, compiled by Langer
Research Associates in New York, is based on responses to
telephone interviews with a random sample of about 1,000
consumers ages 18 and over.

Each week, about 250 respondents are asked for their views on
the economy, personal finances and buying climate; the
percentage of negative responses is subtracted from the share of
positive views and divided by three. The most recent reading is
based on the average of responses over the previous four weeks.

The share of households with a positive view of the economy was
14 percent last week, little changed from the prior week.

Those with an upbeat rating on their personal finances climbed
to 45 percent from 43 percent, and the share saying it was a
good time to buy needed items held at 25 percent.

A separate measure of expectations showed 33 percent of those
surveyed said the economy will get better. Compared with the 29
percent who said it was getting worse, the gap narrowed to 4
percentage points from a 10-point spread in favor of optimists
in January. This gauge represents responses from 500
Americans interviewed in the first two weeks of each month.

Retail sales rose less than forecast in January, signaling it
will be difficult for consumers to sustain last quarter’s pickup
in spending without bigger gains in employment, figures from the
Commerce Department showed this week.

Purchases increased 0.3 percent, the smallest gain since a drop
in June. The data also indicated winter snowstorms may have
played a role in the slowdown as Americans stayed away from
home-improvement stores and restaurants.

BJ’s Restaurants Inc., which operates its namesake brewery,
pizza and grill chains, is among companies concerned about
rising fuel prices, unemployment, and home foreclosures. While Huntington Beach, California-based BJ’s sales trends have
continued to be “solid” since the start of 2011, customers are
under pressure, Chief Executive Officer Jerry Deitchle said on a
conference call on Feb. 10

“We are still operating in a very difficult, volatile
environment for consumer discretionary spending,” Deitchle said.
“Consumers are facing significantly higher food and gasoline

The comfort index can range from 100, indicating every
participant in the survey had a positive response to all three
components, to minus 100, signaling all views were negative. The
margin of error is 3 percentage points.

The responses are broken down by participants’ sex, age, income
level, race, region of residence, political affiliation, marital
and employment status.


Meghan Womack, +1 212-617-8514,