UCI

Latinos likely to play important role in county's future economic growth, UC Irvine's 1997 Orange County Annual Survey shows

Irvine, Calif., Sept. 29, 1997 -- Orange County consumers are more optimistic about the U.S. economy -- and about the nation's long-term prospects for prosperity -- than they've been in more than a decade, according to the University of California, Irvine's 1997 Orange County Annual Survey.
The Consumer Confidence Index in Orange County jumped nine points in the past year to 110, surpassing the nationwide index (now 107) for the second straight year. The local index has increased by 20 points in just two years.
"This is a significant surge in enthusiasm about the economy that shows we are on a very positive track right now in Orange County," said UCI professor Mark Baldassare, who conducted the survey along with research associate Cheryl Katz. "We're in a period now when people have a lot of confidence in the sustained growth of the U.S. economy. Even during the economic boom of the mid-80s, we didn't see this much optimism about the national economy."
The Consumer Confidence Index was especially high -- a stunning 122 points -- for those with annual household incomes of $80,000 or more.
"The economy seems to be doing the most for those who have the most money," Katz said. "Two in three residents making $80,000 or more say they're better off now than last year, compared to only half of people making less. This probably reflects the ability of wealthier residents to take advantage of the bull market in stocks and other money-making opportunities the current economy offers."
The random-sample survey, conducted by telephone Sept. 4-14, questioned 1,002 adult residents. The margin of error is plus or minus 3 percent. Since 1986, the survey has included five questions on consumer confidence that also are used in national surveys conducted by the University of Michigan. (The Consumer Confidence Index is calculated from a formula that computes scores for each question, then adjusts by the 1966 base period. The national index score was 100 in 1966.)
The ebullience of Orange County consumers was evident in the responses to four of the five questions used to measure overall consumer confidence:

• Seventy-three percent expect good times for the U.S. economy next year, while 16 percent predict bad times. Optimism has risen 12 points since 1996. This is the most positive reading in the 11 years this question has been asked.
• Fifty-six percent believe the U.S. will have continued good economic times during the next five years, while 31 percent expect bad times. Confidence is up 6 points from last year, making this the most positive long-term U.S. outlook on record.
• Seventy-three percent think this is a good time for major purchases, while 11 percent call it a bad time. The view that this is a good time to spend money is up 8 points since last year.
• Fifty-two percent say they are financially better off now than a year ago, while only 15 percent are worse off. The number with positive views is up 6 points from 1996.

One result was unchanged from last year: 51 percent expect to be financially better off next year than they are now, while 4 percent think they will be worse off.
"People feel good about the economy in general, but many have yet to see significant personal gains because we're still in a period of slow growth in wages," Katz explained.
The high level of optimism about personal finances that was evident in countywide ratings a decade ago is now found only in the upper-income group. Of those earning $80,000 or more a year, 60 percent look forward to continued personal financial gains in the coming year.
For the first time this year, the survey included a special focus on the confidence ratings of Latinos, who represent a quarter of the county's population and one of the fastest-growing consumer groups in Orange County. The Consumer Confidence Index for Latinos is a highly positive 102.
More than half of the county's Latinos report that they are financially better off now than last year and expect to be better off again next year. Six in 10 say this is a good time to make major purchases, and two in three expect the U.S. economy to be in good shape next year.
"These results show that Latinos are likely to play an important role in the growth of Orange County's economy," Baldassare said. "Those who are making plans for marketing goods and services in Orange County shouldn't overlook this large and fast-growing consumer group."
Baldassare said the overall survey results should give retailers reason to be optimistic about the upcoming holiday buying season. "For a lot of people, there don't seem to be any storm clouds on the horizon, so they feel very positive about making consumer purchases, even though they haven't been making strong gains in personal income. The hesitation some people feel about their personal finances is the only thing that might slow things down somewhat."