With less than two weeks to go before Election Day, the Bloomberg Consumer Comfort Index (CCI) continued to rise this week, reaching its highest level in six months.
Up 12.8 points in just the past two months, the weekly CCI asks Americans to rate the national economy, their personal finances and the buying climate.
Compiled for Bloomberg by Langer Research Associates, the index ranges from minus 100 to plus 100. U.S. households’ views on the economy were the best since early May, with the index rising to minus 34.6 in the period ended Oct. 21.
While the gains in the index may be helped by the improving housing market, lower gas prices and a declining unemployment rate, the upcoming election may also be shaping Americans’ perceptions of the economy. For Democrats, the CCI rose to minus 22.1, the best since mid-April and 20.4 points higher than a low in mid-August. Confidence among Republicans fell to minus 37.2, a four-point drop from just one week ago.
The findings illustrate how Americans may be perceiving the economy through the prism of politics. For 31 straight weeks, the CCI has been higher for Democrats than for Republicans. The index is also is up 10.6 points for independents to minus 41.6, their best since late June.
“Such gains in anticipation of presidential elections are not the norm,” said Gary Langer, president of Langer Research Associates. “While its improved trajectory could potentially help Barack Obama, the CCI remains far lower than its levels when incumbents George W. Bush and Bill Clinton won re-election.”
Langer also points out that no similar trend has occurred in the weeks leading up to any of the past six presidential elections (the index began in late 1985).
“It’s closer to its level two weeks from the 1992 election (minus 48) when George H.W. Bush lost a second term,” Langer said. Just one pre-election reading was worse — when Barack Obama first ran in 2008, it was at minus 50.
The Bloomberg Consumer Comfort Index, compiled by Langer Research Associates in New York, conducts telephone surveys with a random sample of 1,000 consumers 18 and older. Each week, 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 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 for the headline reading is 3 percentage points.