California consumer confidence took a stunning, record-breaking surge in February as a new president took office, the state economy further reopened and the hopes grew that the pandemic’s wallop could end soon.
Conference Board polling showed the monthly consumer confidence index for California at 101.6 for February — a pandemic era high that’s up from a revised 69.7 a month earlier but down from 122.9 a year ago.
That 46% one-month gain is the largest jump in the index’s history dating to 2007. But it’s still 17% below February 2020, just before COVID-19 throttled the economy.
I’m fairly certain California shoppers were cheered by Joe Biden’s inauguration Jan. 20 after a highly contentious election that included a storming of the Capitol by supporters of then-President Donald Trump. Biden handily won California.
Consumers also witnessed a curious start to 2021 for the state economy and Gov. Gavin Newsom.
The governor made moves to reopen schools and trim business restrictions as California’s pandemic infections and death moderated after a late 2020 upswing. Does that make citizens happy? Or perhaps it’s that a voter drive to recall Newsom has advanced?
But there’s zero doubt about the positivity bounce associated with the ramp-up of inoculations to battle the pandemic. Lowering coronavirus rates should bolster the economy. Just look at what happened with two benchmarks of shopper psyche inside the Conference Board index.
California consumers like what they’re seeing. A measure of current economic conditions scored February at 67.3 — a record-breaking jump from an eight-year low of 30 a month earlier. Still, this yardstick is well below 164 a year earlier — as the virus first spread.
Plus, the future looks as bright as ever, at least according to the outlook barometer for February. Golden State shoppers’ hopes for their financial prospects took its 12th largest jump to a record-breaking 124.5. That’s up from 96.1 the previous month and 95.5 a year earlier.
California wasn’t alone with its sunnier disposition.
The Conference Board also tracks seven other big states and overall confidence rose in five: Florida, Illinois, Pennsylvania, Ohio and Michigan. Optimism fell in Texas and New York. Over 12 months, optimism is down in all seven.
Among these states, current conditions improved for the month in Florida, Pennsylvania and Ohio. Again, no state had year-to-year increases.
The economic outlook was more upbeat in Florida, Illinois, Pennsylvania and Michigan, but over 12 months forward-looking optimism rose in just two — Illinois and Michigan.
Those mixed emotions were also seen in the U.S. consumer confidence index. It rose slightly to 91.3 in the month from 88.9 but is still far off the pre-pandemic 132.6 of February 2020.
U.S. shoppers’ view of current conditions increased in the month but, like California, are still far from upbeat pre-pandemic levels. Meanwhile, nationwide economic hopes dropped for both the month and year.
Depressed interest nationwide for two major purchases serves as a curious caveat to other signs of buoyancy.
Just 5.9% of Americans polled in February said they had plans to buy a home within six months — down from 7.4% a month earlier and 6.8% a year ago. It’s even below the five-year average of 6.2%, suggesting the hot homebuying market may have become too hot for some house hunters.
Then look at car purchases that haven’t rebounded like housing. Nationwide, 10.2% have plans to buy a vehicle, down from 11% in January and 12.6% a year ago. Remote work and homeschooling mean less driving and lowered demand.
Source: Orange County Register