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O.C. Residents Grow Gloomier About Economy : Survey: Consumer confidence hits new low despite new Administration, cheaper homes and low interest rates.

September 16, 1993|JOHN O'DELL | TIMES STAFF WRITER

IRVINE — Despite a change of administrations in Washington, low interest rates and more affordable home prices, Orange County residents say their confidence in the economy and their personal finances is worse now than a year ago--when it hit what observers then were calling an all-time low.

But pessimistic as they may be, a majority of county residents also think this is a good time to make major purchases such as furniture, appliances and televisions.

That may reflect a fatalistic acceptance: The current economic climate isn't going to change much, so we might as well make the best of it. A similar attitude has helped spur growth in Texas and Colorado, where collapsing real estate values and falling oil prices caused a deep recession in the late 1980s.

Orange County's continuing slump in consumer confidence, tracked by pollster Mark Baldassare at the UC Irvine School of Social Ecology as part of the university's Orange County Annual Survey, mirrors a national trend. The local consumer confidence index dropped to 73 this year from 75 in 1992, while the national index, compiled by the University of Michigan, is at 75, down from 77 a year ago.

In 1986--the first year UCI conducted an Orange County confidence poll--the local index stood at 109.

"People are feeling the effects of the bad economy this year more than ever," survey researcher Cheryl Katz said. "They are starting to feel helpless because the recession has gone on for so long."

Turning things around, she said, will require "solid evidence of job growth."

Two weeks ago the state Employment Development Department reported that Orange County's July jobless rate hit an 11-year high of 7.4%, with 12,200 fewer jobs on local businesses' payrolls than a year earlier.

But if 36% of the county's residents say they are financially worse off this year than last, why do 52% say this is a good time to make major household purchases?

"It looks as if many residents believe that the 1990s are the discount decade," Baldassare said.

The survey represents the opinions of 1,007 adult residents interviewed from Aug. 20 through Aug. 29. The margin of error is 3%.

Among the survey's other findings:

* The median household income in the county is $47,000, up just 1% from last year when adjusted for a 3% inflation rate. In 1990 and 1991, the median was $49,000; it fell to $45,000 in 1992.

* Pessimism increases with age. A consumer confidence index for 18- to 34-year-old Orange County residents would stand at a fairly positive 84, or 11 points higher than the overall level. Dragging things down are the 35-54 age group, with a level of 68, and the 55-and-older group, which drops three more points to 65.

* Income doesn't seem to affect confidence as much as age does. The index level of those with annual incomes of less than $36,000 was 71. It jumped to 76 for the $36,000-$50,000 group and nudged up just one more point, to 77, for those earning more than $50,000.

UCI's consumer confidence findings are part of a larger survey, to be released in November, that seeks county residents' views about transportation, housing, environment and the general quality of life.

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