Californians more confident about economy -- but they're still not spending
Californians feel more confident about the economy -- but not enough to open their wallets and spend.
State residents are growing more upbeat about the economy’s current and future prospects, according to a survey released Friday by the Anderson Center for Economic Research at Chapman University. That’s an important precursor to a sustained economic rebound.
But their willingness to buy pricey items such as TVs or cars has plunged dramatically since earlier this year -- a sign that they don’t expect general economic improvement to help them.
“Most [people] expect no significant income increases and hence are planning to cut back on big-ticket items,” the report concluded.
An index of consumer sentiment toward current economic conditions has improved steadily since early 2009, rising to 82.7 in May from 81.1 at its last reading in February. It’s up from an anemic 58.2 in February 2009. Still, economic fear is widespread; readings below 100 mean there are more pessimists than optimists.
Future expectations are more positive, climbing to 105.1 last month, from 97.7 in February.*
[*For the record: An earlier version said consumers' future expectations was 91.6 in February. It was 97.7.]
But consumer willingness to spend on big-ticket items sank to 71.4 from 89.6 in February. The index is back to the low 70s, where it spent much of last year. The report came on the day that the U.S. Commerce Department reported an unexpected 1.2% drop in retail sales in May.
The U.S. economy still appears to be growing -- but at a frustratingly slow pace for U.S. consumers.