Culture

California’s economic anxieties at heights last seen in 2013


The last time California consumers were this worried about their financial futures, the statewide median-priced home cost $379,000.

You have to go back to 2013’s first quarter to find a time when the measure of “expectations” within the Conference Board’s California consumer confidence index was lower than 2024’s second quarter average.

Yes, that’s just a little over 11 years ago. When the nation was still shaking off Great Recession rust. When the Dow Jones stock index hit 14,254 – recouping all its global financial crisis losses. When California’s unemployment rate was down to the 9% range – the best in four years.

My trusty spreadsheet’s quarterly averages of confidence data found California expectations dropping 5% in the past year. And there’s been plenty to worry about at mid-year 2024 – from political tension, nationally and globally, to high-profile job losses to a Federal Reserve determined to cool the economy and whip inflation with higher interest rates.

Don’t forget that shoppers who are nervous about the future typically are more than another economic data point. Skittish consumers don’t spend robustly. And that can further damage the business climate.

Curiously, California consumers feel the current economy is marginally OK despite all the challenges. The “present situation” slice of the index for spring 2024 was off only 1% in a year to its lowest reading since March 2021, just as pandemic lockdowns were ending.

And the combination of these two optimism markers shows overall confidence is off 3% in a year to the lowest since December 2020.

Note that it’s not just Californians with monetary anxieties.

Expectations nationwide also haven’t been this bad since 2013. Yet, US consumers’ view of the present situation is only at a six-month low. So that adds up to overall confidence nationwide dropping to a two-year low.

Spending surge?

What folks tell pollsters like those who create confidence indexes – and what consumers actually do – aren’t always the same thing.

For example, my spreadsheet found cash registers at California merchants were ringing more frequently in early 2024.

Statewide retail sales, minus online shopping, as measured by the Census Bureau averaged 1.4% annual growth in the six months ended in February. That’s a reversal from a shopping decline at a 0.5% annual rate in the previous half-year.

The spending rebound was aided by continued job growth, moderating inflation and heavier credit card use. Plus, less spending at gasoline stations thanks to falling pump prices – fuel sales are down at a 9% annual rate – was welcome news to other shopkeepers.

So where were Californians actively shopping?

Some pandemic shopping hot spots remain popular. Health goods and personal care stores’ sales rose at a 6.7% annual rate through February.

“Miscellaneous” retailers – including pet stores and second-hand shops – were up at a 5.9% rate. And general merchandise stores – giant discounters to dollar shops – rose 4.3% as bargain-hunting remained a passion.

Other merchants shook off coronavirus challenges. Electronics and appliance stores, weak after lockdowns ended, rebounded at a 4.6% annual rate. Car dealers, which finally had inventory to sell, …read more

Source:: The Mercury News – Entertainment

      

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