Consumer Confidence Hits Five-Year High
Never since the depths of the 2008 recession have Californians been so buoyant about the economy and its future.
According to a survey released in September by the Anderson Center for Economic Research at Chapman University in Orange, Calif., consumer confidence hit a healthy 94.2 in the third quarter of 2012, up from the second quarter, when it was at 89.0.
This is quite a difference from the second quarter of 2008, when the reading was at 57.6. An index below 100, however, reflects a higher percentage of pessimistic consumers versus those who are optimistic.
The California Composite Index is based on three indices: consumers’ outlook on current economic conditions, their view of future economic conditions and consumers’ spending plans.
The index measuring consumer sentiment about future economic conditions was quite positive with a reading of 105.6 in August, up from a revised reading of 93.6 in May.
Recent improvement in the job market positively affected consumers’ assessment of the current economic conditions and future economic activity.
However, the index measuring people’s planned spending on big-ticket items decreased to 86.1 in August from the revised May reading of 96.0.
That may be due to higher gas prices cutting into consumers’ disposable income.
Every quarter, the Anderson Center for Economic Research sends out a six-question survey to 5,000 residences throughout California to measure consumer confidence. The historical response rate is 5 percent to 10 percent.—Deborah Belgum