California Consumer Sentiment Rises 37% in Last Quarter, Survey Says

A crowd gathers inside South Coast Plaza, the largest shopping mall in California, in Costa Mesa, Calif., on May 15, 2018. (Ryan Miller/Getty Images for Coach)

Commentary

Californians are bullish again.

That is the result of the most recent consumer sentiment survey among Californians conducted by Claremont McKenna College and Chapman University.

Indeed, the scores for questions related to business conditions—both nationally and how they will affect families’ economic situation—are both at their highest levels since the survey among 2,000 randomly selected Californians began in early 2018.

Growing Consumer Sentiment Among Californians

Even though the California economy grew at a 3.7 percent pace during second-quarter 2018 and a 3.5 percent pace during third-quarter 2018, the survey shows that today’s economic hype is even stronger. An additional 20 percent of Californians are excited about the prospects for U.S. business conditions next year than they were three years ago, when the economy was doing well under the Trump-era tax reductions and  reductions in regulations.

Simultaneously, an additional 9 percent of Californians are excited about business conditions’ affect on your their family’s economic situation next year than they were three years ago.

The belief that families’ own economic situations are likely to improve during the next year will likely translate into increased consumer spending throughout the next few months as people take vacations, attend sporting events, dine out at restaurants, and visit amusement parks.

The schools’ overall assessment of Californians’ consumer sentiment increased a spectacular 37 percent from last quarter, when much of Southern California was still reeling from the COVID-19 pandemic and related government-imposed shut-downs.

California’s consumer sentiment reading is now 90.6 points, up massively from the 65.9 points reading during the first-quarter of this year.

Orange County Consumer Sentiment Grows

Not surprisingly, Orange County consumers are also bullish.

For Orange County, the Chapman University and Claremont McKenny College data goes back five years, further than it does for the whole of California.

Even so, Orange County consumers also are more optimistic about U.S. business conditions next year than at any time in the history of the Chapman-Claremont McKenny Consumer Sentiment survey.

The current score for Orange County consumers regarding U.S. business conditions next year is now at 122.6, well above any previous reading and about 16 percent higher than when the California-wide survey started in mid-2018.

Orange County consumers’ view of business conditions’ effect on their family’s economic situation next year is highest since first-quarter 2017.

Recovery Mode

Chapman University business professor Marc Weidenmier summed up the data well when he said: “The large jump in California consumer sentiment over the last quarter sends a strong signal that the state economy is in recovery mode. This trend should continue for the foreseeable future unless we see another wave of the virus.”

Tim Shaler is a professional investor and economist based in Southern California. He is a regular columnist for The Epoch Times, where he exclusively provides some of his original economic analysis.