Upstate consumer sentiment edged up in February

The shaky start to 2014 on Wall Street and the negative feeling that followed may have carried over into February, according to one analyst. And, it may have affected New York consumers’ willingness to spend.

Consumer sentiment in upstate New York rose 2.1 points to 74.1 in February, according to the latest monthly survey that the Siena (College) Research Institute (SRI) released today.

Upstate’s overall-sentiment index of 74.1 is a combination of the current-sentiment and future-sentiment components. Upstate’s current-sentiment index of 83 rose 2.3 points from January, while the future-sentiment level increased 2 points to 68.4, according to the SRI data.

The upstate figure was 2.2 points below the statewide consumer-sentiment level of 76.3, which fell 1.2 points from January, SRI said.

New York’s consumer-sentiment index was 5.3 points lower than the February figure of 81.6 for the entire nation, which rose 0.4 points from January, as measured by the University of Michigan’s consumer-sentiment index.

The figures left Doug Lonnstrom, professor of statistics and finance at Siena College and SRI founding director, “kind of surprised.” 

“I actually thought we might have better numbers in February,” he says.

Even though the stock market had a “good year” in 2013, “the floor just fell out” in January, Lonnstrom says, and he believes that negative feeling carried over in February.

“I mean the consumer got so whipsawed in January with all those gains they made last year, and they saw a lot of that go away in January; it scared the daylights out of them,” Lonnstrom says. “I mean that affects their pension plan, [and] buying plans.”

The stock market then “bounced back” in February, hitting some new highs, but that isn’t reflected in this survey’s figures, he adds.

Lonnstrom maintains consumers may have been “really worried” about the market activity in January.

When compared with the previous three years, the state’s overall consumer sentiment of 76.3 is down 1 point from February 2013, up 1.5 points from February 2012, and has increased 8.6 points compared to February 2011, according to the SRI data. The sentiment index measured 60.8 in February 2009.

In February, buying plans rose 2.7 points to 14.1 percent for cars and trucks. Buying plans were down 3.3 points to 28.6 percent for consumer electronics; decreased 5.6 points to 18.3 percent for furniture; slipped 1.4 points to 3.9 percent for homes; and fell 1.6 points to 13.5 percent for major home improvements.

Gas and food prices
In SRI’s monthly analysis of gas and food prices, 58 percent of upstate respondents said the price of gas was having a serious impact on their monthly budgets, which is down from 62 percent in January.

In addition, 51 percent of statewide respondents indicated concern about the price of gas, up from 50 percent in January, according to SRI.

When asked about food prices, 62 percent of upstate respondents indicated the price of groceries was having a serious impact on their finances, down from 67 percent in January and 71 percent in December. 

About 63 percent of statewide respondents expressed concern about their food bills, down from 65 percent in December.

SRI conducted its survey of consumer sentiment in February by random telephone calls to 623 New York residents over the age of 18. 

As consumer sentiment is expressed as an index number developed after statistical calculations to a series of questions, “margin of error” does not apply, SRI says. 

Buying plans, which are shown as a percentage based on answers to specific questions, have a margin of error of plus or minus 3.9 points, SRI said.       

Contact Reinhardt at ereinhardt@cnybj.com