California buyers get nervous as confidence falls to two-year low – Daily Breeze

“Swift Swings” takes a quick look at an economic trend.

The number: The Federal Reserve's war on inflation does not fit the psyche of California consumers.

The source: In my trusty spreadsheet, I looked at the Conference Board's consumer confidence index for July, which is derived from monthly shopper surveys from the state and seven other states, as well as the entire country.

Quick analysis

Consider the decline in this nationwide measure of buyer optimism.

The decline was 18% within one year.

The last time Californians were this gloomy was in July 2022.

It has fallen 25% since March 2022, when the Fed began fighting inflation with the economy's kryptonite – higher interest rates. And the central bank's goal is to curb spending by businesses and consumers alike.

Or look back to the pre-pandemic period of 2018-19, and you'll find that this summer's confidence index is 21% below that of the “good old days.”

Why this decline? The index calculations provide a clue: Californians are angry about current conditions.

The current situation confidence index fell by 21% in July, a year-on-year decline. This is not very surprising considering that the national unemployment rate has been above 5% for ten consecutive months, shortly after hitting a record low of 3.8% in August 2022.

And the confidence index suggests that California's future is comparatively less bleak. The “expected value” measured there has only fallen by 14 percent in the last twelve months.

Frankly, nervousness about the economic situation is not just a problem in the Golden State – California's decline is steep.

The US confidence index has fallen by 12 percent in a year and by 7 percent since March 2022. However, national optimism in July is 22 percent below its level in 2018-19, when we did not yet know about the coronavirus.

Elsewhere

Take a look at the fluctuations in trust in the other seven countries monitored, sorted by change over the past year…

Pennsylvania: 22% less in one year and 22% less since March 2022.

Texas: Down 17% in one year and down 1% since 2022.

Michigan: Down 17% in one year and down 4% since 2022.

Illinois: Down 15% in one year and 14% since 2022.

Florida: Down 14% in one year and 10% since 2022.

New York: Down 13% in one year and down 8% since 2022.

Ohio: An increase of 10% (yes, an increase) and 6% since March 2022.

Jonathan Lansner is a business columnist for the Southern California News Group. Reach him at [email protected].