A prediction on the near-term future of the U.S economy and continued investment gains on Wall Street has New York consumers in a better mood and more willing to spend their money on big-ticket items. That’s the assessment of one analyst following the release of a monthly survey on confidence among New York consumers. Consumer […]
A prediction on the near-term future of the U.S economy and continued investment gains on Wall Street has New York consumers in a better mood and more willing to spend their money on big-ticket items.
That’s the assessment of one analyst following the release of a monthly survey on confidence among New York consumers.
Consumer sentiment in upstate New York edged higher by 1.1 points to 76.5 in June, the third straight monthly increase, according to the latest survey the Siena (College) Research Institute (SRI) released July 3.
Upstate’s overall-sentiment index of 76.5 is a combination of the current sentiment and future-sentiment components. Upstate’s current-sentiment index of 83.7 increased 2.6 points from May, while the future-sentiment level remained unchanged at 71.8, according to the SRI data.
The future-sentiment level had increased nearly 8 points in the May survey, the data indicated.
Upstate’s overall sentiment was 2.3 points below the statewide consumer-sentiment level of 78.8, which rose 2.8 points from May, SRI said.
New York state’s consumer-sentiment index was 3.7 points lower than the June figure of 82.5 for the entire nation, which inched up 0.6 points from May, as measured by the University of Michigan’s consumer-sentiment index.
June was “actually a pretty good month” from the consumer standpoint, says Douglas Lonnstrom, professor of statistics and finance at Siena College and SRI founding director. “Fairly good economic news and some good economic predictions that the economy is going to grow a little bit better than people thought a year ago,” he says.
Reuters on June 17 reported that its survey of economists found the U.S. economy is on a “self-sustaining growth path” that should allow the Federal Reserve to start raising interest rates in the second half of 2015.
Also, the stock market is performing well (the S&P 500 index is up more than 7 percent year to date), and “that makes people feel good when their retirement plan has a little more value,” Lonnstrom adds.
When compared with the previous three years, the state’s overall-confidence sentiment of 78.8 is up 0.1 points from June 2013, up 4.3 points from June 2012, and has increased 13.9 points compared to June 2011, according to the SRI data. The sentiment index measured 64.3 in June 2009.
The overall index is 15 points higher than it was back in 2007, says Lonnstrom.
“Over that five-year period, we’ve had a pretty good move up,” he says.
The current component is up 24 points over that same time period, and the future component is up 9 points, Lonnstrom adds.
In June, buying plans were up 1.3 points to 11.8 percent for cars and trucks; increased 2.1 points to 34.1 percent for consumer electronics; and rose 0.6 points to 20.9 percent for major home improvements.
“If people feel better, then they’re more likely to buy things,” he says.
However, buying plans were down 4.2 points to 19.7 percent for furniture, and slipped 0.8 points to 4.3 percent for homes, according to the SRI data.
Gas and food prices
In SRI’s monthly analysis of gas and food prices, 65 percent of upstate New York respondents said the price of gas was having a serious impact on their monthly budgets, which is down from 67 percent in May and 69 percent in April.
In addition, 54 percent of statewide respondents indicated concern about the price of gas, down from 58 percent in May and 56 percent in April, according to SRI.
The price of gas is about 20 cents higher now than it was a year ago, yet the concern declined, Lonnstrom noted.
He believes the slow rise in gas prices, and not a 20-cent increase in one month, was a factor in the lack of consumer concern.
“There was no sticker shock there with the gas prices,” he says.
When asked about food prices, 73 percent of upstate respondents indicated the price of groceries was having a serious impact on their finances, up from 68 percent in May.
About 68 percent of statewide respondents expressed concern about their food bills, up from 64 percent in May.
Lonnstrom also noted the increase in concern about food prices offset the decline in concern about gas prices.
In a July 6 article, The Wall Street Journal cites data from the U.S. Department of Agriculture, which predicts overall food prices will increase 2.5 percent to 3.5 percent this year after rising 1.4 percent in 2013, as measured by the U.S. Department of Labor’s consumer-price index.
SRI conducted its survey of consumer sentiment in June by random telephone calls to 628 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.
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