Arizona consumer confidence edges up sllightly - East Valley Tribune: Business

Arizona consumer confidence edges up sllightly

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Posted: Saturday, May 4, 2013 12:09 pm | Updated: 7:39 am, Wed May 8, 2013.

It's not a big breakthrough.

But Arizona consumers are feeling more confident about the current state of the economy since it went into the toilet during the recession.

New figures Wednesday from the Behavior Research Center show 29 percent of the 700 adult heads of households questioned last month think current business conditions are good. That's the best figure in years.

Conversely, just 24 percent rate business conditions as bad. That's a drop of 7 full points since the survey was conducted last fall.

And the percentage of those questioned who think jobs are hard to get is just 43 percent. While that's hardly anything to crow about, the figures were 20 points higher two years ago.

The overall consumer confidence, however, index slid a bit -- from 71.3 last October to 69.6 now -- driven down by ongoing fears of what is yet to come. And much of that is the result that fully a quarter of those surveyed expect fewer jobs six months from now than currently, up 10 full points.

Economist Dennis Hoffman of the W.P. Carey School of Business at Arizona State University, said that's a factor which cannot be ignored.

"If people feel jobs are going to be harder to get in a year, they hunker down,'' he said. Hoffman said that can create a self-fulfilling prophecy: Less spending now weakens the economy down the road.

Hoffman, however, said he's not particularly worried.

"I'm really not seeing any signs that's coming to bear,'' he said. Hoffman said all indications are that consumers are continuing to spend.

That is particularly borne out in vehicle sales. Hoffman said there have been double-digit percentage year-over-year increases.

And Hoffman said there's one other factor.

He said gasoline prices normally spike in the spring. That has not happened.

In fact, he said, wholesale prices are in the neighborhood of $2.70 a gallon. Hoffman said that could translate to $3.20 at the pump -- and possibly even flirting with $3 gasoline.

"That'll pump people's tires,'' Hoffman quipped.

Jim Haynes, president of Behavior Research Center, said he's not surprised that people appear a bit more optimistic, at least about the way things are right now.

"A lot of people are just saying it hasn't gotten any worse in the last couple of months,'' he said. And that, say Haynes, makes people feel better.

Still, he said Arizona is far from where the confidence needs to be to sustain a healthy economy.

That 69.6 figure is computer on a baseline of 100, which is what Arizonans were feeling in 1985. It topped 100 before the economy went bust, bottoming out in the mid 40s and has been bumping along in the 50s and 60s ever since.

The survey has a margin of error of 3.8 percent.

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