California consumers started 2026 on an anxious note, with their collective confidence in the economy\u00a0falling to a five-year low.<\/p>\n
My trusty spreadsheet\u2019s review of the Conference Board\u2019s Consumer Confidence Index for January showed a 28% decline from December in California\u2019s shopper pysche. It\u2019s a sharp reversal from a steep jump in the index, which is based on consumer surveys, seen between November and December.<\/p>\n
Taking a longer-term view, California confidence is down 25% since January 2025, when Donald Trump started his second presidential term. This is the lowest California confidence score since December 2020 \u2013 when coronavirus was twisting the economy. Optimism is also 22% below the average results since 2007.<\/p>\n
Consumer confidence is a critical part of the business climate, as their spending habits account for roughly two-thirds of economic activity. Pessimistic shoppers may skip or delay various purchases \u2013 especially pricey ones like homes or autos.<\/p>\n
The Trump administration\u2019s unorthodox, domestically focused economic policies don\u2019t align well with California\u2019s liberal politics or the state\u2019s global business orientation. Meanwhile, conservative Californians aren\u2019t happy with the state government\u2019s management.<\/p>\n
At the same time, consumers worry that California\u2019s job growth is slowing to a crawl amid stubbornly elevated inflation.<\/p>\n
By the way, California optimism grew by 8% in Trump\u2019s first year of his first White House term, which began in January 2017.<\/p>\n
By the slice<\/p>\n
Think about the two slices of this confidence index.<\/p>\n
California\u2019s \u201cpresent situation\u201d index, which tracks consumer views of current economic conditions, fell 32% in January and is down 31% over the year.<\/p>\n
It\u2019s now at its lowest level since January 2021. This shopper\u2019s view of today\u2019s financial climate is 17% below the index\u2019s 19-year average.<\/p>\n
Meanwhile, the \u201cexpectations\u201d index, which tracks consumer views of the future, was down 24% for the month and off 20% year over year.<\/p>\n
It\u2019s the bleakest outlook since April 2025, as California expectations run 26% below average.<\/p>\n
Emotions elsewhere<\/p>\n
Nationally, confidence was down 10% for the month and off 20% in Trump\u2019s first year of his second term.<\/p>\n
This brought American optimism to its lowest level since May 2014; it\u2019s also 8% below the 19-year average.<\/p>\n
In Trump\u2019s first term, U.S. confidence rose 11% in his first year.<\/p>\n
Yet, the nation was by no means universally pessimistic in January. Ponder the seven other states tracked by the Conference Board.<\/p>\n
Just three states parallel California, with confidence down in January and the past 12 months.<\/p>\n
Texas optimism fell 22% for the month and 26% year over year to the lowest level since December 2020.<\/p>\n
In\u00a0New York, optimism dropped 25% for the month and 17% year over year. Confidence is at its lowest since April 2025.<\/p>\n
And Ohio optimism is off 1% for the month and 10% over the year.<\/p>\n
Two others have muddled trends.<\/p>\n
Florida confidence was up 2% for the month but down 13% in a year.\u00a0Meanwhile, Michigan optimism rose 7% in January but is down 23% in a year.<\/p>\n
And shoppers seem buoyant in two states.<\/p>\n
Pennsylvania optimism rose 16% in January and 2% in a year, as Illinois confidence rose 6% for the month and 14% in a year.<\/p>\n