Consumer Confidence

The April 2010 Index of Consumer Sentiment (ICS) in Orange County is 67.3, lower than the statewide Index of 68.8*, and about five points lower than sentiment in the nation as a whole (72.2)**. This represents a stunning decline from the Index of Consumer Sentiment in Orange County of 112 a decade ago.

The University of Michigan Index of Consumer Sentiment combines assessments of current economic conditions with future expectations for personal/family finances and business conditions in the country as a whole. This is an important indicator of the nation’s economic health because consumer spending accounts for roughly 70% of the Gross Domestic Product (GDP).

With regard to their current financial situation, more than  half (54%) of Orange County survey respondents say they are worse off today, just over one quarter (27%) perceive things to be about the same as one year ago and less than one fifth (19%) say they are better off.

Looking ahead, Orange County residents are more pessimistic than those statewide.  Twenty-six percent of  Orange County adults (compared to 35% statewide) expect to be better off financially a year from now, 45% expect to be about the same and 23% in Orange County expect to be worse off, compared to just 13% statewide.

Long-term expectations in Orange County are also more pessimistic than in the state as a whole.  Although about a third (35% in Orange County, 33% in the state) expect, “continuous good times during the next five years or so,” 53% in Orange County compared to 40% in the state predict, “periods of widespread unemployment or depression.”

The Index of Consumer Sentiment (ICS) utilizes a 12-month timeframe and (although the two measure the same thing and are frequently confused) the ICS is different than the Conference Board’s Index of Consumer Confidence (ICC), which employs a six-month timeframe and a different computational formula.

^*See http://www.bizjournals.com/sanjose/stories/2010/04/19/daily85.html  (4/23/2010)
^**See http://www.market-harmonics.com/free-charts/sentiment/consumer_sentiment.htm  (Data through 4/30/2010)