Survey shows employed Arizonans are spending money again - East Valley Tribune: Arizona

Survey shows employed Arizonans are spending money again

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Posted: Thursday, February 3, 2011 2:13 pm | Updated: 8:46 am, Sat Feb 5, 2011.

Unemployment may still be at levels not seen since the 1980s.

But the latest state consumer confidence survey shows that Arizonans who do have jobs apparently think the worst is over. And they're starting to spend again.

The report puts the statewide confidence index at 62.8. And while that's still far below the 106.3 it hit four years ago - before the boom went bust - it marks the second straight quarter the number has gone up.

Dennis Hoffman, an economics professor at the W.P. Carey School of Business at Arizona State University, said he's not discounting the high unemployment rate.

"We know unemployed people are stressed," he said. What's changed, he said, is the attitude of those who have kept their jobs and are fully employed.

In the last two years, Hoffman said, they curtailed their buying.

"And now they appear to be venturing forth again," he said. "That's a real good sign."

More than one in five people questioned by Earl de Berge for the Behavior Research Center said they plan to buy a new computer or electronic equipment worth at least $500 in the next six months. There also is an uptick among those who are planning to buy home furnishings or a new car or truck.

But Hoffman said it may be Mother Nature that really provides the springboard for the state's economy: He said "one more brutal winter" in the Midwest or back East may finally convince people it's time to retire, pack up and move to Arizona.

Spurring that along, Hoffman said, is that housing in the state is very affordable and mortgage interest rates are near historic lows.

"Of course, that presumes their 401Ks are OK and they're able to sell their homes," he conceded.

"And if those folks show up, then there's going to be more employment opportunities for existing Arizonans and for others to move in," Hoffman said.

Still, he said, there is no magic - or immediate - cure for what ails Arizona.

"People have to keep in mind the hole is so deep," Hoffman said. "This does not mean that overnight our revenue problems and budget problems are solved."

But he said the fact that the slide in consumer confidence has declined suggests that retail spending will increase, and with it the tax revenues that flow to the state.

That feeling things are looking up is not universal, de Berge noted.

The biggest jump came among Pima County residents, where the confidence index is higher than it has been since the end of 2007. There also is increased optimism among those living in Maricopa County.

But de Berge said concerns about the job market are tamping down any increase in the rural areas.

The survey is based on interviews with 700 adult heads of households conducted between Jan. 22 and 27. It has a margin of error of 3.8 percent.

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