Consumer confidence among Nebraska residents fell last month, a possible reflection of their post-holiday blues and January’s stock market declines.
The Bureau of Business Research at the University of Nebraska-Lincoln issued its first-ever Nebraska Consumer Confidence Index today, a measure of consumer attitudes in the state, said economist Eric Thompson, the bureau’s director.
The consumer confidence index is based on responses to four survey questions about consumers’ sense of economic security, he said.
January’s index level was 84.7, down from 89 the previous month. The index uses a neutral baseline of 100 to reflect confidence levels.
“This indicates that consumer confidence is weak in Nebraska,” Thompson said. “The drop may reflect a decline in optimism in the month after the Christmas holiday and the sharp drop in stock market valuations during January.”
The index is not directly comparable to other, national indexes, because the questions are different, Thompson said.
By contrast, the bureau, which also conducts the Survey of Nebraska Business, found that Nebraska’s business owners and managers were optimistic last month, expecting that sales and employment would show solid growth over the next six months.
Thompson said he launched the new consumer confidence index to take the monthly pulse of the state’s consumers. Surveys are sent to 500 random households each month. In January, 133 households responded, for a response rate of 27 percent.
Consumers are asked if they think their household is economically better off today than six months ago, and if they think it’s a good time to purchase a major household items, such as an appliance or vehicle.
Then they’re asked if they expect their economic situation to improve in six months time, and if they would consider, at that point, making a major purchase.
Respondents also are asked to pinpoint their biggest financial problem.
In January, almost half of consumers said they were concerned about household costs, including health care expenses, cost of living or major expenses such as car or home purchases.
Another 20 percent of respondents said they were concerned about their income level, or their job or business; 16 percent replied that adequate savings was the single most pressing issue, followed by paying off debt, 9 percent; and 6 percent said stock market performance was their top concern.
Both surveys are conducted by faculty and students affiliated with the Bureau of Business Research.
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