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Consumer Spending Rises, State Reports

Economy: Latest figures show 5% gain for 3rd quarter of '98. Analysts expect pace to continue through this year.

April 27, 1999|STEPHEN GREGORY | SPECIAL TO THE TIMES

Californians, brimming with confidence about the state of the economy, pushed up sales of durable and nondurable goods 5% last summer, spending their money on new cars, home furnishings and building materials at a double-digit pace, state officials said Monday.

Economists have forecast that consumers will continue to spend at a strong pace and will probably do so through the rest of the year.

According to the most recent figures available, Californians spent $91 billion on taxable durable and nondurable goods between July and September, the state Board of Equalization reported. That was up from $86.6 billion spent in the third quarter of 1997.

Spending in Los Angeles County rose at a 4% rate and at 6% in Orange County. The fast-growing Inland Empire--which encompasses Riverside and San Bernardino counties--posted an increase of nearly 10%, according to the figures, which are preliminary and are subject to revision.

State economist Ted Gibson said California's roughly 7% growth in personal income last year largely fueled the spending increases.

Although more than six months have passed since the reporting period, Gibson predicted that consumer spending rates continued to increase during the fourth quarter of 1998 and the first quarter of 1999. He also forecast further growth through the end of the year.

"We should be seeing good, solid growth given that income has been rising quite nicely," he said.

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