L.A. County residents have reversed their long run of countering national trends on consumer confidence, registering an upward outlook on the local economy, especially their future jobs.
That’s the overview from the quarterly consumer sentiment survey of the L.A. market by the Lowe Institute of Political Economy at Claremont McKenna College, which had recorded drops in consumer confidence for seven consecutive quarterly readings even as the local economy has boomed over the same period.
The second quarter snapped the negative streak, as the index for the local economy rose 7 percentage points, reaching 96.3 compared with 89.4 in the first quarter.
The index was down on a year-to-year basis – it stood at 100.3 for the second quarter of last year.
“This quarter witnessed a remarkably broad-based rise in consumer sentiment, which seems best explained by the continued strength of the labor market,” said Cameron Shelton, director of the Lowe Institute associate professor of political economy at Claremont McKenna.
The indices for consumer sentiment on the local and national economies are the first of their kind for Los Angeles. They are produced through an alliance between the Lowe Institute and Chapman University in Orange.
The index has been made public on a quarterly basis for the past year but was tracked privately for two years before its debut for the purposes of establishing a benchmark. The high-water mark for the index so far is 126.3, reached in the third quarter of 2016.
The second quarter reading was from a sampling in June of roughly 500 Los Angeles County residents who answered questions about their current economic situation, their outlook for their own finances and spending in coming quarters, and their outlooks on both the local and national economies.
The June survey came against a backdrop of a local economy many consider to be at or near full employment, with a near-record 4.5 million payroll jobs in Los Angeles County and an unemployment rate of 4.5 percent, near its lowest point in at least 40 years.
The underlying picture didn’t seem to matter much for local residents until the latest survey, according to Shelton.
A key finding behind the change in outlook in the second quarter survey, he said, was the index reading for those who felt they had a good chance at finding a job in the next year – up 16 percent to 115.8, the largest percentage gain registered for any of the responses to the seven questions in the survey.
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