California consumers suddenly turn grumpy
California consumer confidence took a U-turn in September, falling to a four-month low by one index's tally.
My trusty spreadsheet looked at the September results of the Conference Board's monthly consumer confidence indexes derived from polling of shoppers in California, seven other states and across the nation.
The overall California confidence yardstick had shown growing optimism in the summer. But this index dropped 4% in September after rising 12% off May's 2023 low. This swing leaves the confidence benchmark 8% below September 2022's figures.
Details
Think about two measurements that create the overall confidence index to understand what California consumers are thinking …
CURRENT CONDITIONS » Californians feel “meh” about today's economy. This measurement of what's going on now rose 1% in a month following a 7% increase during the previous 3 months. Still, it's off 1% in 12 months.
EXPECTATIONS » You see, it's the future that seems to be making Californians grumpy. Ponder the polling that asks Golden State consumers what might happen next in the economy.
This forward-looking measurement dropped 10% in September — a sharp reversal from a 17% gain in the previous three months. Over 12 months, California's future looks 15% worse.
It's not hard to tie this nervousness to weakness found in some key economic gauges outside the polling.
Shoppers are cooling their spending at California stores. Retail sales statewide grew 2% in the year ended in May versus a 6% upswing 12 months earlier and a stunning 35% jump as the economy emerged from its pandemic shell in May 2021.
The job market seems lethargic, too.
California unemployment is running at 4.6%, an 18-month high. Job growth meanwhile is 1.9%, the slowest in the pandemic rebound. And private industry hourly wages have grown just 1% since August 2022, the smallest increase in nine years.
Elsewhere
To be fair, California's shrinking consumer confidence is in line with the national psyche. US consumer confidence fell 5% in September and is 4% lower in a year. Optimism was up 6% previous three months.
And the seven other states tracked have split opinions.
September was very gloomy in Texas and New York — both had their lowest confidence score over the past 24 months.
Optimism in Florida and Pennsylvania was the fourth-lowest in two years. And Illinois's confidence was middling: 12thhighest in 24 months.
But Michigan's is up 12% higher in a year to its fifth-highest level in two years. And Ohio's 16% surge pushed its confidence grade to a 26-month high.
Bottom line
The national poll results give hints about what's bothering shoppers.
This year's big money woe — inflation — seems tamer to consumers, with expectations for cost-of-living increases at 4.8% a year. That's the lowest forecast in 35 months.
And though 58% of consumers see more interest rate hikes ahead, that's the best projection in 29 months. Otherwise, U.S. shoppers seem dour. For example, 14% see better economic conditions ahead, compared with 18% a year ago. And 16% see more hiring, versus 18% a year ago.
Plus just 4.9% are considering a home purchase — the second-lowest reading in the past 49 months.