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Consumer Confidence
In Orange County, confidence in the economy has taken a strong turn
for the worse, largely because of pessimism about the national economy.
The five-question Orange County Consumer Confidence Index now registers
93. This represents a 19-point drop from the 2000 Orange County Annual
survey and the largest annual decline since 1990 - the beginning of
the last recession. The Orange County index is similar to the national
index, which now stands at 92. The national index dropped 17 points
from last year.
The Consumer Confidence Index is calculated from a formula provided
by the University of Michigan, which computes scores for each of 5 questions
(better - worse + 100), then adjusts for the 1966 base period. The national
index score was 100 in 1966. A score above 100 on the Consumer Confidence
Index is considered very good, since 85 is the average national score
over the 50 years the survey has been conducted.
Orange County results for the individual items that make up the index:
There has been a
dramatic decline in optimism about the national economy: 48 percent
see good times in the next year, compared to 70 percent in 2000. Forty-five
percent see bad times ahead compared to 14 percent in 2000.
The long-term outlook
on the U.S. economy is now mixed: 46 percent see good economic times
over the next five years, while 45 percent expect bad times. In 2000,
60 percent predicted good times and 21 percent predicted bad times.
Fifty-five percent
say they are better off now than last year, and 21 percent say they
are worse off. While the proportion who say they are better off is unchanged
from last year, the number saying they are worse off has increased:
In 2000, 13 percent said they were worse off.
The percent who
say they will be better off next year is down six points from last year
(45% vs. 51%); however, the percent saying they will be worse off is
only slightly higher (7% vs. 5%).
Positive attitudes
about making large purchases have declined seven points from a year
ago. Sixty-three percent now call it a good time for such expenses,
down from 70 percent in 2000. The percent calling it a bad time to buy
big items increased from 10 percent to 26 percent.
Less affluent Orange County residents show less consumer confidence:
For instance, those making less than $40,000 per year have an index
rating of 88, compared to 98 for those making more than $80,000. Despite
their lower incomes, Latinos have a slightly better index score (96)
than do non-Hispanic whites (93). Men (98) have higher consumer confidence
scores than women (88).
Table:
Consumer Confidence
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