Arizonans did not need a big drop in the stock market to tell them that the economy is in trouble.
A new state consumer confidence report Friday shows that the number of people considering new purchases remains at what Bruce Hernandez, senior vice president of the Behavior Research Center, said is essentially a dismal level. In essence, they continue hanging on to their cash.
Technically speaking, the index -- essentially a measure of how Arizonans feel about current and future conditions -- took a small uptick from three months earlier. But it remains half of what it was in 2006, before the economic boom went bust.
More to the point, Hernandez noted the survey was conducted at the end of July, before this week's sharp losses in the market. He said just that news alone would have pushed the numbers sharply lower.
Add to that the dismal job growth figures announced Friday and the fact that nationwide unemployment, while down, remains above 9 percent, and you've got a recipe for consumer depression.
"Each of those things absolutely build on people,'' Hernandez said.
Dennis Hoffman, an economics professor at the W.P. Carey School of Business at Arizona State University, said the real story here is the fact that the consumer confidence numbers are barely moving.
"The once promising hopes of accelerating growth in the second half of 2011 are fading as it becomes clear that consumer confidence continues to languish,'' he said.
"Without improvements in confidence, businesses will be slow to hire,'' Hoffman continued. He said that creates a "perpetual circle of no confidence, no jobs -- and no jobs, no confidence.''
That's also the assessment of Lee McPheters who also is an economics professor at the W.P. Carey school.
"The consumer is out of the game,'' he said. "That is not going to change until hiring changes, unemployment changes, home prices stop falling.''
At the same time, McPheters said businesses are sitting on large amounts of cash.
"But there's just not enough demand to justify hiring,'' he continued. "And there isn't enough demand because consumers are not in the game.''
Just one in five Arizonans consider current business conditions good, compared with 43 percent who say times are bad. And while 25 percent of those questioned say business conditions will be better six months from now, two thirds foresee things being no better, or actually getting worse.
And nearly a third of Arizonans believe there will be even fewer jobs by the end of the year than there are available now, with four in 10 saying the unemployment situation -- and the state's jobless rate north of 9 percent -- will not get any better.
As bad as those numbers are, Pima County residents are even more pessimistic than the rest of the state, with 75 percent predicting business conditions will not improve in six months.
McPheters predicted continued high unemployment and weak consumer demand for goods, with a possible "double dip'' recession, and no real signs of recovery for two to three years.