California consumer sentiment has risen to its highest level in nearly a year as the job market has improved, according to a survey released Friday from the A. Gary Anderson Center for Economic Research at Chapman University.
Chapman's measure of consumer sentiment jumped to 89 for the first quarter of 2006 from 80 in the fourth quarter of 2005. However, it still down from an index reading of 100 in the first quarter of 2005.
An index level under 100 indicates consumers are generally pessimistic about the condition of the economy. The index has now been under 100 for four consecutive quarters as consumers are concerned about high gas prices and weak wage growth, the report said.
In generating the index number, Chapman surveys about 5,000 California residents, asking them how they feel about the current and future condition of the state's economy.
In previous quarters, there was a wide divergence, with people generally much more pessimistic about current conditions than future conditions. In the first quarter, that switched, as consumers were slightly more optimistic about current conditions. The report cited improved employment numbers as the major reason for this change.
The survey also asks residents what their personal spending plans for big ticket items are for the next six months. The index for future spending fell in the first quarter to 92 from 98 in the fourth quarter, indicating that consumer spending for the next six months will likely be less than what took place during the last quarter.
Some of this decline may be due to a seasonal drop in spending plans after the holiday season; however, the index for future spending actually rose in the first quarter of 2005 compared to the fourth quarter of 2004.
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