Low job growth in California weakens consumer confidence

Job growth in California has mostly struggled to catch up to the rest of the nation, and that continues to be reflected by a recent study of consumer confidence in the state.

The California Consumer Sentiment Survey, performed quarterly by economists at Chapman University, declined almost six points in the second quarter, from a nearly six-year high of 99.7 in the first three months of 2013 to 93.9. A reading of 100 would indicate an even split between those who were optimistic about the path of the economy and those who were pessimistic.

Most of the survey, which was released in late June and was based on responses mailed in during the second half of May, suggest that people in the state have become more concerned about where the economy might go in the next few months. It also indicates consumers are not thinking about making major purchases, at least until the economy shows a marked improvement.

The survey, based on as many as 500 responses, roughly parallels a national study done by the University of Michigan that covers the same time period, said Esmael Adibi, Chapman University’s chief economist. The June consumer sentiment study released by The Conference Board did show a strong uptick.

An estimated 195,000 jobs were created nationally in June, and unemployment was unchanged at 7.6 percent. The jobless rate for May in California was a full point higher than that, and it was 9.2 percent — lowest in almost five years — in San Bernardino and Riverside counties.

“Still, in California our unemployment is higher than the national level, and in regions like the Inland Empire it’s way higher,” Adibi said. “If someone there is unemployed, he’s not going to see the economy as being as good as other people do.”

Adibi said consumers may still remember the 2 percent pay cut out of paychecks to cover Social Security that went into effect in January. Also, the rapid escalation of home sale prices, which has mostly been attributed to investors competing with local homebuyers, could be making some consumers nervous, he said.

Consumer spending accounts for at least two-thirds of economic growth, and weak job growth continues to make at least some Inland residents hesitant about shopping for anything outside of necessities.

Rose Camino, 54, of Riverside, has not worked for three years, and her situation became more worrisome when her husband passed away six months ago. Camino, who holds a real estate license, said she’s not about to make any major purchases.

“My finances are not very good right now,” she said.

Job growth in the Inland area has been weak during the last two months after showing some strength during the winter. In April and May, the number of payroll workers in the area was only about 1 percent higher that the same months in 2012.

Data for June will be released by the state Employment Development Department on July 19. Unemployment in June typically spikes because many students graduate from school and enter the workforce, increasing the number of people who are looking for work.

Tim Tumminia, 47, of Riverside, who left a job as a manager for a firm that builds pipelines a few months ago, said there was probably enough of that kind of work to keep people busy.

But he said many people in the job market are being forced to settle for less than what they’re used to and less than what their earnings potential would be.

“People are afraid to work for lesser money, but there is work,” Tumminia said.

Some retailers report that their bottom lines are improving. Don Snyder, owner of Rest EZ Mattress, a Hemet business, said that June was his best month in five years, although it wasn’t quite up to pre-recession levels. July is off to a good start, he said.

Snyder said he couldn’t say whether the good month could be attributed to a rush from consumers who put off buying a new mattress until it became absolutely necessary. “I don’t know if it’s a fluke, but I’m not complaining,” he said.

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