California consumers are now more bullish about their own families’ prospects than at any other time over the last three years.
Every quarter since the beginning of 2018, Chapman University and Claremont McKenna College have asked 2,000 California consumers their views of various issues facing the nation and impacting their families’ finances.
Respondents during the April-June survey this year (pdf) gave the highest, most favorable responses ever given in the survey in three different categories: America’s business conditions over the next 12 months, the effect business conditions will have on individuals’ own households over the next 12 months, and the likelihood of finding a job in the next 12 months.
Before the most recent quarter, there had never been an index reading above the 100 baseline index regarding respondents’ job prospects for the subsequent year.
However, in the most recent survey, the index level of 107.4 is 7.4 percent higher than the previous all-time high and more than 10 percent higher than the last pre-pandemic quarter’s reading of 96.5, seen during the October-December quarter of 2019.
Similarly, California consumers reported very high sentiment toward business conditions next year and those business conditions’ effect on their own household. Before the January-March quarter of this year, the previous index high tabulating answers to those questions were both 100.0, seen when the index was first started during the January-March quarter of 2018.
Regarding California consumers’ sentiment of business conditions next year, a new high of 125.2 was reached during the second (April-June) quarter this year, besting the previous high of the previous quarter of 120.4 by 4.0 percent—both substantially above the previous high of 100 three years prior.
How California consumers believe business conditions will impact their own households for the next year also reached an all-time high for the 3.5-year-old survey: The second quarter 2021 reading was 1 percent higher than the previous quarter’s reading and about 10 percent higher than the previous all-time high when the survey started in the first quarter of 2018.
Summing up their results, the authors of the study wrote, “[C]onsumer sentiment has rebounded in the state of California. The rapid reversal is testament to the impact of lockdowns and the coronavirus on economic activity.”
The authors go on to state, “Consumer sentiment should continue to move higher over the next quarter unless recovery is derailed by inflation or a return of the coronavirus.”