Consumer confidence in AZ up after holidays, higher than nat’l index - East Valley Tribune: Business

Consumer confidence in AZ up after holidays, higher than nat’l index

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Posted: Tuesday, January 17, 2012 3:59 pm | Updated: 5:58 pm, Tue Jan 17, 2012.

Unemployment is still north of 8 percent and more than half of Arizonans say jobs remain hard to get.

But they're so convinced things are going to be better by this summer that the state's Consumer Confidence Index shot to its highest level since the middle of 2008. And so upbeat are Arizonans that the index here is a full five points higher than the similar national survey.

Dennis Hoffman, an economics professor at the W.P. Carey School of Business at Arizona State University, said the latest survey of 700 adult heads of household, conducted earlier this month, shows that a definite trend is developing.

Less clear, he said, is why, given that so many Arizonans do not think things are all that great right now.

Consider: The survey shows just 22 percent of those questioned say current business conditions are good, numbers that have remained pretty steady for a couple of years. And 56 percent say that jobs are currently hard to get.

But asked about what they expect to happen six months from now, 36 percent of Arizonans foresee better business conditions, an 8 point jump over just three months earlier. And just 16 percent of those asked predict fewer jobs in six months, a rate close to half in October.

"That's a little bit of a puzzle,'' Hoffman said.

What is likely, he said, is that consumers see signs that things are, in fact, picking up.

Hoffman said all indications are that sales this past holiday season are running 5 to 6 percent above the same time a year earlier.

"Every month that goes by, the future just looks a hair brighter,'' he said.

"They're seeing a light at the end of the tunnel,'' Hoffman continued. "And it doesn't appear to be a train coming at them.

That optimism, Hoffman said, has translated into Arizonans being willing to open up their wallets.

He said recent data from the state Department of Revenue show an increase in the sale of durable goods, including higher-priced items like furniture and even automobiles. At the same time, Hoffman said, sales at bars and restaurants also appear to be rising.

"What I'm seeing in all of this is just incredible resilience in attitudes,'' he said.

Hoffman said even the fact that the housing market appears to be stabilizing a bit and home values may finally have hit bottom also helps make people believe that brighter times are ahead.

Most significant, he said, is just that feeling alone may help drive the economy.

"Some of this stuff is, to some degree, self-fulfilling,'' Hoffman said.

"You can't get this economy going without a warming of attitudes,'' he continued. "As these attitudes continue to warm and people act on them by making purchases, taking advantage of employment opportunities, et cetera, the economy will continue to get better and it will all feed off itself.''

Still, Arizona has a long way to go before residents return to that unbridled optimism that existed in 2007 before the recession and before the state's housing balloon went flat.

That was when the state had a record 2.7 million people working and Arizona's jobless rate was less than 4 percent. The confidence index at the time was above the magic 100 mark, a figure based on how people were feeling in 1985.

The survey has a margin of error of 3.8 percent.

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