The “Looking Glass” ponders economic and real estate trends through two distinct lenses: the optimist’s “glass half-full” and the pessimist’s “glass half-empty.”
Buzz: Despite numerous financial challenges, California shoppers told pollsters that economic conditions were OK in January.
Source: My trusty spreadsheet looked at January’s California consumer confidence index from the Conference Board to get a sense of shoppers’ economic sentiments.
Debate: Which is more important, economically speaking: Consumers seeing a solid current economy – or their worries about the future?
Glass half-full
The overall California confidence index started 2024 at its highest level in seven months. January was 4% above December, but it’s still flat vs. January 2023, and up only 1% vs. the 2022-23 average.
The “present situation” slice of the index hit its highest mark in 11 months. That’s after this measurement of what’s going on right now gained 8% vs. December. It’s still up only 1% vs. January 2023, but it’s 5% above the 2022-23 average.
The good news, economically speaking, is that inflation and interest rates are down and job growth continues.
Glass half-empty
Golden State consumers in January remained iffy about the future.
The “expectations” slice of the index suffered its lowest start to a year since 2019. This yardstick of a shopper’s financial outlook has been stuck in neutral: It was off 1% vs. December and January 2023 and is 2% below the 2022-23 average.
The bad news powering uncertainty is that unemployment has risen slightly, and California homes are still totally unaffordable. Did I mention “geopolitical risks” of a global scale?
Bottom line
Yes, this California consumer sentiment benchmark signals a decent start to the year.
But it’s not like Californians are crazy enthusiastic about the economic picture – especially in what could be a combative election year.
Overall consumer confidence is down 8% vs. the pre-pandemic 2018-19 average. The present situation is off 9% vs. 2018-19. And expectations are 6% below 2018-19.
Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
