UCI

Consumer Confidence

Orange County consumers are more bullish about their personal finances and the U.S. economy today than at any time in the 1990s.
The Orange County Consumer Confidence Index stands above 100 points for the first time since the late 1980s, indicating the return of very positive consumer sentiments. The local index has also jumped ahead of the Consumer Confidence Index. All five questions in our Consumer Confidence Index show considerable improvement from 1995.

Forty-six percent of county residents say they are financially better off now than they were a year ago, while 21 percent feel they are worse off. The number with positive views is up 8 points from 1995. Fifty percent expect to be financially better off next year than they are now, while only 6 percent think they will be worse off. This is a 5-point improvement from last year. Sixty-five percent think this is a good time for major purchases, while 18 percent see this as a bad time to buy big consumer items. There has been a 6-point drop in the view that this is a bad time to buy. Graph

Sixty-one percent expect good times for the U.S. economy next year, while 23 percent are predicting bad times. Optimism has increased by 13 points since 1995. Fifty percent believe the U.S. will have continued good economic times during the next five years, while 34 percent think there will be bad times. This is up 5 points from a year ago. Graph

All together, the five-question Consumer Confidence Index in Orange County is now at 101, which is up a sharp 11 points from a year ago. Nationwide, the Consumer Confidence Index stands at 95, according to the University of Michigan. The local index is now in the 100-plus range where it was during Orange County's booming 1980s, and is well above the dismal figures of earlier this decade. Graph

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

Consumers may be feeling better about their finances and the U.S. economy, but their incomes are showing little improvement. Median annual household income now stands at $48,000, only slightly higher than last year. Consumers here did not actually lose ground, since the inflation rate in the region was below 2 percent. The trend of no income growth has persisted throughout the 1990s, in sharp contrast to rapid income growth in the 1980s. Graph

The South remains by far the county's most affluent region, with six in 10 households earning more than $50,000. The Central County lags behind the other regions, with half earning less than $36,000.