“Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.
Buzz: California consumers were seemingly upbeat in early February, according to one poll. Of course, you must note the survey was taken before Ukraine became a war zone.
Source: My trusty spreadsheet analyzed The Conference Board’s monthly polling of shoppers, creating various consumer confidence indexes, including one for California.
The Trend
Let’s first look at overall statewide confidence. This index was 117.7 in February, up from a revised 115 a month earlier and up from 110.3 a year ago.
That’s a 2% one-month gain and a 7% gain over 12 months. And California’s confidence is above the average 113 for the five years before the pandemic.
So overall, Californians are as happy as before the coronavirus struck — and before Russia invaded Ukraine.
Now let’s look at two measures inside the statewide index …
California consumers’ view of current conditions: Declining, with the index at 137.6 for the month — down from 142.9 a month earlier and above 94 a year earlier. Has optimism peaked? This measure averaged 141 in 2015-19. It seems Californians were modestly unenthusiastic about February.
Shoppers outlook: Upbeat, with the index at 104.5 for the month — up from 96.5 the previous month but down from 121.2 a year earlier. This measure averaged 94 in 2015-19. This above-average optimism will be tested by the Russia-Ukraine conflict.
The Dissection
The Conference Board tracks the nation and seven other states — Texas, New York, Florida, Illinois, Pennsylvania, Ohio and Michigan. How did California compare?
Overall confidence: Three increases among the seven states in a month; all seven were up over the year. National: Down for the month; higher over 12 months.
Current conditions: One increase in a month; all seven up over the year. National: up for the month; higher over 12 months.
Outlook: Four increases in a month; two up over the year. National: down for the month; lower over 12 months.
Arch-rivals? Texas’ overall confidence fell 4% in the month but increased 17% in the year. Florida saw a 6% one-month drop and an 18%, 12-month advance.
Other views
The Conference Board also asks consumers nationwide about the job market and plans to make major purchases in the next six months …
More jobs? 21.3%, down from 22.1% in a month; down from 29% 12 months ago.
Buy a home? 6.5%, down from 7% in a month; down from 7.5% 12 months ago.
Buy a vehicle? 11%, down from 11.5% in a month; down from 11.3% 12 months ago.
Major appliance purchase? 47.2%, down from 49.2% in a month; down from 52.9% 12 months ago.
And then there’s the latest unnerving trend — inflation. People polled expect the cost of living to be 7% higher in a year, up from 6.8% the month before and up from 6.5% a year earlier.
How bubbly?
On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … ONE BUBBLE!
Let’s remember it’s hard for the California economy to move forward without confident consumers.
And consider the ratio between California and national optimism: 6.5% higher in California for February vs. 3.5% higher in California a month earlier. A year ago it was 15.9% higher here.
Now add the geopolitical challenges of Ukraine to a California mindset, which seems ready to embrace to a post-pandemic economy.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
