UCI

Personal Finances

This year, we asked residents about their employment security. Fears about job loss go well beyond current local unemployment rates, indicating why residents are in such a gloomy mood and showing great caution in their household spending.

Thirty-six percent say they are worried that they or someone in their family will lose their job in the next year, with 19 percent saying they worry "a lot." Six percent say they or a family member have already lost their job. Seventeen percent say they worry "a little" and 41 percent say they are not at all worried about the possibility of job loss affecting them.

Job fears are greatest in the Central County, where 42 percent say they are worried, and lowest in the South County, where 30 percent worry about job loss. In the North and West County, 36 percent worry about unemployment.

Those earning less than $36,000 a year are more concerned about losing their job (46%). Job fears are least prevalent among those earning $80,000 or more (22%), while about a third of those in the middle-income groups are worried about their jobs.

There are no differences by age group.

Today, 14 percent are "very" satisfied and 52 percent are "somewhat" satisfied with their financial situation. Thirty-four percent are dissatisfied with their personal finances.

Satisfaction with one's financial situation continues to be considerably lower today than in the pre-recession years. But this year saw no decline in satisfaction compared to 1992, perhaps reflecting the small income growth seen this year.

Since 1982, however, the number who are dissatisfied with their personal financial situation has climbed 16 points, and has risen 7 points since 1991.

Dissatisfaction with personal finances is highest among 35- to 54-year-olds, of whom 40 percent say they are unhappy with their situation, and lowest among those aged 55 or older, where only 26 percent express dissatisfaction. Among 18- to 34-year-olds, 31 percent are not satisfied with their finances.

By income, those earning $36,000 or less are three times as dissatisfied (46%) as those earning $80,000 or more (14%). In the lower-income category, 8 percent are very satisfied with their finances, compared with 29 percent in the higher-income group.

There are no differences in personal financial satisfaction by region.

CONSUMER CONFIDENCE

Another year, another new low in consumer confidence. This seems to be the story of Orange County in the 1990s.

The 1993 survey finds the Orange County Consumer Confidence Index at 73. This is below last year's record low of 75, and behind the national average which currently stands at 75.

A growing pessimism about personal finances and the long-term outlook for the nation's economy contributed to the decline in the overall index. Only one measure has improved from last year, and it's one that sends a glimmer of hope to retailers.

The one shining light is that 52 percent think now is a good time to make major purchases, while only 34 percent say it is a bad time. Last year, only 48 percent thought it was a good time to spend money on big-ticket items such as furniture and appliances, and 40 percent said it was a bad time.

However, overall the bad news outweighs the good news in the annual assessment of consumer confidence.

Thirty percent of residents describe themselves as "better off" financially now than they were last year, while 36 percent say they are "worse off." In 1992, 35 percent reported being better off than a year before. This is the first time that the number saying they are worse off exceeds those saying they are better off.

Looking to next year, 41 percent say they will be better off next year than they are now. In 1992, 44 percent expected to be better off in the coming year. Thus, optimism about future finances is continuing to drop.

Fifty-eight percent expect bad economic times nationwide in the next 12 months, while only 29 percent think conditions will be good. These numbers are unchanged from the record lows of last year that led to the defection from Republican President Bush.

By a 2-1 margin (60% to 31%), more residents expect bad economic times than good times nationally during the next five years. Long-term optimism has declined since last year, and is the worst recorded to date.

Taking all these responses together, the five-question Consumer Confidence Index in Orange County is now at 73. This is a 12-point drop from 1990 and a 36-point fall since 1986, the first year the University of Michigan questions were used in Orange County. Nationwide, the Consumer Confidence Index now stands at 75, according to the University of Michigan.

The Consumer Confidence Index is calculated from a formula provided by the University of Michigan, which computes scores for each question (better - worse + 100) and then adjusts by the 1966 base period. The national index score was 100 in 1966.

This year, for the first time, we analyze the Orange County Consumer Confidence Index by demographic group. Residents 18 to 34 are the most optimistic, with index scores of 84. Meanwhile, residents 35 and older are considerably less hopeful, with index scores below 70. Upper-income households and South County residents are not much more positive than the countywide average.

Median annual household income stands at $47,000, showing a 4 percent increase from the 1992 survey. The Consumer Price Index indicates that the inflation rate has been about 3 percent in the past year, thus, Orange County consumers made a small gain in income this year. Still, they are lagging behind the average income levels in 1990.

The South is still the county's most affluent region, with 62 percent making more than $50,000 a year and only 22 percent making less than $36,000. In the North and Central County, about four in 10 households have incomes below $36,000, while fewer than four in 10 earn more than $50,000 a year.