”Survey says” unveils rankings and scorecards that evaluate different geographic locations. However, it should be noted that these grades are subjective interpretations of data.
Buzz: In September, consumer confidence in California took a U-turn and reached a four-month low according to one index.
Source: My trusty spreadsheet analyzed the September results of the Conference Board’s monthly consumer confidence indexes which compile data from shoppers in California, seven other states, and nationwide.
Topline
Earlier this summer, the overall California confidence indicator showed a growing optimism. However, in September, this index dropped by 4% after a 12% increase from its lowest point in May 2023. As a result, the confidence benchmark is now 8% below September 2022.
Details
To gain insight into what California consumers are thinking, it’s essential to consider two measurements that contribute to the overall confidence index:
Current conditions: Californians have a lukewarm sentiment about the current economy. This measurement, representing the ongoing situation, increased by 1% in the past month following a 7% rise in the previous three months. Nevertheless, it is down by 1% compared to the same period last year.
Expectations: The future appears to be the cause of dissatisfaction among Californians. This measurement examines what Golden State consumers anticipate for the economy. In September, it dropped by 10%, reversing a 17% gain from the previous three months. Over the course of a year, California’s future outlook appears to be 15% worse.
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It’s not difficult to connect this nervousness with weaknesses observed in key economic indicators beyond the survey data.
Shoppers in California have reduced their spending at local stores. Statewide retail sales increased by 2% in the year ending May, compared to a 6% growth in the previous 12 months, and a significant 35% surge as the economy emerged from the pandemic in May 2021.
The job market also appears sluggish.
California’s unemployment rate stands at 4.6%, reaching an 18-month high. Meanwhile, job growth is only 1.9%, the slowest rate in the post-pandemic recovery. Additionally, hourly wages in the private industry have only grown by 1% since August 2022, marking the smallest increase in nine years.
Elsewhere
To be fair, California’s declining consumer confidence aligns with the overall national sentiment. US consumer confidence fell by 5% in September, registering a 4% decline over the course of a year. However, there was a 6% increase in optimism in the previous three months.
The sentiment among the other seven states tracked is mixed.
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Texas and New York experienced extremely low confidence scores in September, the lowest in the past 24 months. Optimism in Florida and Pennsylvania ranked fourth lowest in two years, while Illinois ranked in the middle with the 12th highest confidence level over 24 months. On the other hand, Michigan’s optimism surged by 12% over the past year to its fifth-highest level in two years. Ohio saw a 16% increase, reaching its highest confidence grade in 26 months.
Bottom line
The national poll results provide insight into the concerns of shoppers.
This year, inflation, the major financial concern, appears to be less worrying for consumers, with expectations for cost-of-living increases at 4.8% per year. This forecast is the lowest in 35 months.
While 58% of consumers anticipate further interest rate hikes, this is the most optimistic projection in 29 months.
Overall, US shoppers appear to be pessimistic.
For instance, only 14% of consumers expect better economic conditions ahead, down from 18% last year. Similarly, only 16% anticipate increased hiring, compared to 18% a year ago.
Furthermore, only 4.9% of consumers are considering a home purchase, marking the second-lowest reading in the past 49 months.
Contact Jonathan Lansner, the business columnist for the Southern California News Group, at [email protected]
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