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Consumer Confidence
Orange County's consumer confidence scores remain very strong. However,
they are down slightly from a year ago because of worries about the
direction of the U.S. economy in the next year. This trend corresponds
with views that the Asian financial crisis will do some economic harm
in Orange County. The Orange County Consumer Confidence Index now stands
at 105. The local index is ahead of the U.S. Consumer Confidence Index
for the second straight year. The Orange County index dropped by five
points, while the U.S. index has declined by seven points. Here are
the results for the individual questions that make up the Consumer Confidence
Index: Fifty-nine percent expect good times for the U.S. economy next
year, while 28% predict bad times. Optimism is still high, but it has
declined by 14 points since 1997. This is the only significant change
in the five-question index;
Graph: Trends in Consumer Confidence:
U.S. Economy
Fifty-six percent believe the United States will have continued good
economic times during the next five years, while 30% expect bad times.
The number giving positive views is unchanged from last year, which
was the most positive long-term outlook on record; Seventy-two percent
think now is a good time for major purchases, while 14% call it a bad
time. This is statistically unchanged from a year ago;
Graph: Trends in Consumer Confidence:
Household Finances
Fifty-one percent say they are financially better off now than a year
ago, while only 15% say they are worse off. The number with positive
views is statistically unchanged from last year; Forty-nine percent
expect to be financially better off next year than now, while 5% think
they will be worse off. The number expecting to be better off is unchanged
from 1997. Although it is down from last year, the five-question Orange
County Consumer Confidence Index, at 105, still represents one of the
highest scores we have seen since we began asking these questions in
1986. Nationwide, the Consumer Confidence Index stands at 100, 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), then adjusted by the 1966
base period. The national index score was 100 in 1966. A score of 100
or more is considered very good, since 85 is the average score for the
50-year history of the national survey. We contrast the confidence ratings
of non-Hispanic whites with Latinos and Asians, two of the fastest-growing
consumer groups in Orange County. The Consumer Confidence Index for
non-Hispanic whites is 106, for Latinos it is 105 and for Asians it
is 98. Latinos (65%) and non-Hispanic whites (58%) are more likely than
Asians (51%) to believe that the U.S. economy will be in good times
next year. Non-Hispanic whites (74%) and Latinos (73%) are more likely
than Asians (61%) to say that now is a good time to make major purchases.
The more cautious optimism among Asians fits with their assessment of
a bigger economic impact from the Asian financial crisis in the next
year. Latinos, meanwhile, are more bullish than others in their personal
expectations-57% of Latinos expect to be better off next year, compared
with 46% of non-Hispanic whites and 47% of Asians. The three groups
are equally likely to say they are better off now than last year.
Graph:Five-Question
Consumer Confidence Index
Graph: Consumer Confidence:
Latinos and Asians
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