If California consumers are suddenly feeling optimistic, as one study suggests, why does another show that bad times are ahead for the Golden State’s economy?
Welcome to the strange gap in public opinion.
Let’s start with a September poll from the Conference Board that showed consumer confidence across the state had reversed to a 19-month high. More than just a big month-long increase, California shoppers were suddenly in a good mood, and their economic sentiment was in stark contrast to the national dip in optimism seen in the same poll.
Now contrast that Golden State happy conversation with a new poll from the Public Policy Institute of California conducted from August 29th to September 9th. The poll found that 61% of Golden Staters chose the dark side when asked, “Do you think the next 12 months will be good or bad economically?” I understand that.
To illustrate this chasm, my trusty spreadsheet reviewed PPIC polls dating back to 1999 that have regularly asked for answers to questions about the economic outlook. The latest lackluster results can be seen as relatively optimistic when viewed through a short-term prism. Let me explain.
61% of Californians expect conditions to be worse, an improvement from 68% found in a June poll. In fact, this latest result is the lowest level of bad times vibe going back to 10 polls, at 57% as of April 2022. Four years ago, in June 2020, 80% predicted bad times in the future.
Some of this fear-based chaos was created by the Federal Reserve. March 2022, when central banks began fighting inflation with painfully high interest rates. That monetary tightening policy ended this month.
It should be noted that the conflicting signs of economic uncertainty in September are in sharp contrast to the pre-pandemic period of 2015-19, which many considered the good old days.
The 21 PPIC polls at that time had an average of 40% poor forecast times. California’s surprisingly strong consumer confidence is on par with average optimism from 2015 to 2019.
Now, a quarter-century of PPIC economic polling suggests Californians like to worry about the economy.
Since 1999, in 61 of 97 PPIC polls, the number of people expecting “bad news” has exceeded the number of people expecting “good news.” Or, on average, 53% of Californians surveyed expect bad times to come, compared to 39% who expect good times to come.
Jonathan Ranzner is a business columnist for Southern California News Group. Please contact us at jlansner@scng.com.
