California Consumer Confidence Up

California consumers were more upbeat in the third quarter as they responded favorably to the halt in interest rate hikes by the Federal Reserve, according to a survey released Wednesday from Chapman University.
By HOWARD FINE: Los Angeles Business Journal Online
The A. Gary Anderson Center for Economic Research composite index of California consumer sentiment jumped to 88.6 in the third quarter from its recent lows of 79.5 in the second quarter and in the third quarter of 2005. This increase came despite stubbornly high gas prices and a slowing real estate market,

But the index remained below 100 for the sixth straight quarter, meaning that more consumers continue to be pessimistic about future economic performance than optimistic.

A key reason for the third quarter rebound in consumer confidence was the end of more than two years of interest rate hikes by the Federal Reserve Board. That spurred a huge jump in California consumers’ outlook on future economic conditions to 90.3 in the third quarter from 70 in the second quarter.

The major cloud on the horizon was consumers’ planned spending on big-ticket items, which dropped to 86.3 in the third quarter from 92.4 in the second quarter, indicating a likely slowing in big-ticket purchases in the next six months.

The Chapman index is based on a survey of several hundred residences throughout the state.