There's been a decent amount of commentary today regarding last night's release of the not so widely followed ABC Weekly Consumer Comfort Index. At a level of -50, the index remains deeply depressed, and it is one of the only measures of confidence that has yet to show any meaningful rebound. The double dippers out there would have you believe that this is the canary in the coal mine, and a sign of things to come.
A look at the historical record of this index, however, shows that its reliability is weak at best. In the two prior recessions during which this index has been in existence, the indicator kept declining when the recession was well in the rear-view mirror. Following the 1990 recession, the index didn't show a meaningful uptick until late 1993, and it didn't turn positive until February 1997. In the 2001 downturn, it wasn't until early 2003 that the indicator began to turn higher, and it never turned positive until November 2006. After looking at this indicator's prior record, one quickly realizes why this is one confidence indicator that most people have never heard of.