Consumer confidence rebounds statewide, drops in upstate

Confidence among Upstate New York consumers continued to drop in the second quarter, although at not as steep a pace as in the first quarter, a quarterly report from Siena College Research Institute shows.

Source: Siena College Research Institute
Source: Siena College Research Institute

Overall consumer sentiment, which includes current and future sentiment, was 68 in the second quarter, down from 68.9 in the first quarter and 85.2 a year ago. Current confidence among upstate consumers rose to 71.6 from 66.3 in the first quarter, while future confidence fell from 70.6 to 65.7.

Statewide, overall confidence improved to 71 in the second quarter from 66.4 in the first quarter but remained down from 87.1 a year ago. Current confidence was 70.5 statewide, compared with 62.2 in the first quarter, while future confidence rose to 71.3 from 69.1.

Nationally, consumer confidence plummeted to 78.1 from 89.1 in the first quarter and 98.2 a year ago. Current confidence was 87.1, down from 103.7 in the first quarter. Future confidence fell to 72.3 from 79.7 in the first quarter.

“Driven by gains in both current and future sentiment in New York City, the statewide index recovered nearly five points as New Yorkers try to rebound from this pandemic. The overall index, however, is below the breakeven point and is down 22 points from the end of 2019,” said Doug Lonnstrom, professor of statistics and finance at Siena College and SCRI founding director.

Lonnstrom noted that where some said they were better off and expected a good year for the state economy in the first quarter, “now, under the coronavirus cloud, by 8-14 points they say that they are personally worse off and that the year ahead will be a rocky one for New York state.”

In the second quarter, buying plans across the state were up in all categories including vehicles, home improvements, housing, consumer electronics and furniture.

One-quarter of all New Yorkers say that current gasoline prices are having a very serious or somewhat serious impact on their financial condition. This is the lowest percentage in the 12-year history of SCRI’s tracking of the impact of gas prices on New York State consumers. Some 58 percent of state residents indicate that the amount of money they spend on groceries is having either a very serious or somewhat serious impact on their finances.

Among upstate consumers, 19 percent say gas prices are having an impact on their wallets, while 54 percent say food prices are having an impact.

Republicans statewide reported the highest consumer confidence in the second quarter at 80.5, while women reported the lowest at 64.8.

Globally, consumer confidence suffered a record drop in the second quarter. The Conference Board reported a 14-point drop in global confidence to 92 in the second quarter, with North America experiencing the largest drop, 20 points, to 101.

“Early signs of economic rebound in several markets do not necessarily portend a quick recovery in consumer confidence in the coming months,” said Bart van Ark, chief economist of the Conference Board and a co-author of the report. “Countries vary in their approaches to containing the pandemic, managing the direct impacts on employment and income and the trust populations have in their governments, which all influence consumers’ confidence that a recovery will take hold.”

Source: The Conference Board
Source: The Conference Board

A reading below 100 is considered negative, indicating that consumers were slightly more pessimistic than optimistic globally for the first time since 2016. The 14-point drop marks the largest period-on-period decline since the launch of the index in the first quarter of 2005. Moreover, the latest decline is twice as deep as the largest drop during the 2008-9 global financial crisis.

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