Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.

Buzz: My reading of a consumer confidence index suggests that consumers may think economic prospects are better outside of California.

Source: Two confidence indexes — one tracking shopper psyche, the other for executive optimism — created by a joint effort of the A. Gary Anderson Center for Economic Research at Chapman University and the Lowe Institute of Political Economy at Claremont McKenna College.

The Trend

Here’s what caught my eye from the reports. Overall consumer confidence rose 5% in the third quarter, by this math. That’s because statewide hopes for locating a job improved only minimally from springtime’s low, rising just 0.44% from the second to third quarter. The measurement for personal finances improved nicely, up 9% in three months. 

Yet, the same group of 2,000 Californians polled had significantly higher expectations — up 13% this summer — for next year’s U.S. business activity.

The Dissection

Let’s start with the fact that California shoppers and some bosses are more optimistic about the economic outlook.

Shopper confidence plummeted in the late winter and early spring as the pandemic forced a harsh “stay at home” orders for “non-essential” businesses. Second-quarter confidence was down 22%.

And the state’s erratic reopening plan generated only a modest rebound this summer.

Now the boss index — CMC-Chapman’s purchasing manager survey — suggests statewide manufacturing is poised for a solid rebound, the joint index shows.

The index’s latest reading for this year’s fourth quarter was up 32% from the second quarter — to the best since 2019’s final three months. The index fell 24% in the spring quarter. The report suggests makers of high tech and non-durable goods could have the biggest rebounds.

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Another view

The Conference Board’s monthly California consumer confidence index in September took its biggest jump in nine years. Shoppers’ favorable impression of current business conditions doubled in a month.

How bubbly?

On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … TWO BUBBLES!

No decent recovery happens without happy consumers and confident bosses. These reports confirm beliefs there are brighter days ahead.

And if shoppers’ good mood includes a sense of envy of economies of other states — that’s still fine. Unless that appeal creates an opportunity for a moving van.


By Kelley Wheeler

Kelley Wheeler is a Metro reporter covering political issues and general assignments. A second-generation journalist, worked with all major news outlet, she holds a vast expeirience. Kelley is a graduate of USC with degrees in journalism and English literature. She is a recipient of Yale’s Poynter Fellowship in Journalism.

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