Do consumers understand the Fed’s warnings? – Orange County Registry

Bubble Watch examines trends that may indicate impending problems in the economy and/or real estate markets.

Buzz: Californian consumers seem a little more nervous than other Americans. But are buyers not worried enough?

Source: My trusty spreadsheet analyzed the Conference Board’s monthly survey of buyers for September. The polls produce various consumer confidence indexes, including one for California.

The tendency

All three state optimism measures fell for the month ended summer. But there are still many reasons to worry.

The Federal Reserve is working to cool the economy and sky-high inflation. It is reasonable to assume that these measures could trigger a recession.

In addition, there is a poor stock market and a weakening housing market. In addition, interest rates have risen. And add in plenty of geopolitical tensions to make for even more unease.

So a decline in California’s overall confidence index was not unexpected. In September it was 108.7 – down from the revised 113.5 a month earlier and a slight down from 108.8 a year ago.

California consumers’ perceptions of current conditions also fell. That gauge of the current financial picture fell to 143.7 from 152.8 the month before – but it was up from 132.2 a year earlier.

And California buyers had a muted outlook. That measure of expectations fell to 85.3 from 87.4 the previous month and from 93.2 a year ago.


Surprisingly, at least from August through September, there was more optimistic sentiment in Conference Board polls in the nation and seven other states: Texas, New York, Florida, Illinois, Pennsylvania, Ohio and Michigan.

Overall Confidence: Six increases among the seven states in one month; two over the year. Nation: up 4% monthly; 2% less over 12 months.

Current conditions: Five increases in one month; four over the year. Nation: Up 3% for the month; 4% higher over 12 months.

Outlook: Four raises in one month; two over the year. Nation: Up 6% monthly; 7% less over 12 months.

big picture

What Drives Fluctuations in Optimism? The Conference Board is also polling consumers nationwide about the job market and their plans for major purchases over the next six months…

More jobs? 17.5% said yes – up from 17.1% the month before and down from 21.3% a year ago. Do consumers understand the Fed’s warnings? – Orange County Registry

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