The Conference Board reported last month an index of consumer confidence had jumped to its highest level since January 2008. The monthly survey of 5,000 households showed June’s consumer confidence index at 85.2, a sharp increase from 82.2 in May.
Augusta resident Brennan Francois said that although his faith in the economy is gradually increasing, he’s not completely sold that things have bounced back to a point where middle- class and lower-income families can operate efficiently.
However, Francois’ economic morale was high enough for him to take out a loan through his credit union to finance the 2014 Volkswagen Eos he purchased last week in Charleston, S.C.
“The interest rates being the way they are was certainly an incentive,” he said.
Francois said he’s also considering making a home purchase in the metro Augusta area in the near future.
“As I have considered making financial decisions, I’ve noticed that I have been a little less hesitant to make major decisions whereas two or three years ago I was content to just leave things the way they were and wait things out,” Francois said.
A report released in June by Georgia Credit Union Affiliates found increases in all types of auto lending at state credit unions during the first quarter of 2014. Loans rose by 5.4 percent for new vehicles and by 1.5 percent for used vehicles.
In that same time span, first mortgage loans grew slightly by .5 percent, and total loan growth at Georgia credit unions reached 5 percent.
“More Georgians back at work, continued low interest rates on consumer loans and a much-improved housing market have all helped to rebuild consumer confidence,” said Mike Mercer, the president and CEO of Georgia Credit Union Affiliates, based in Duluth, Ga. “Consumers are more willing to take on those big-ticket life purchases, such as new cars and homes.”
Further findings from the Conference Board’s June report posted mixed results regarding the economic outlook.
Of those surveyed about current business conditions, 23 percent reported a “good” assessment and 22.8 percent gave a “bad” response. Nearly 19 percent of consumers felt conditions would improve in the next six months, and 11.4 percent expected things to worsen.
In regard to the labor market, about 14.7 percent of respondents found jobs to be plentiful, while 31.8 percent claimed jobs were hard to come by. Those anticipating a jobs increase in coming months was at 16.3 percent, below the 18.7 percent who are expecting fewer jobs. Almost 16 percent of people thought incomes would grow, and 12.1 percent felt incomes would drop.
Another June survey, complied by Thomson Reuters/University of Michigan, showed consumer sentiment at 82.5, with the largest proportion of households since 2007 making financial gains. Forty percent reported better finances in June, which was up from 35 percent in May and a year ago. Just 25 percent, however, expected their money situation to improve within the year, citing worries that the inflation rate would exceed expected wage growth.
In addition, half of homeowners said selling conditions and home prices were favorable for the first time since May 2006.
An improving housing picture, declining unemployment rate and increasing retail and leisure/hospitality expenditures give reasons for people to feel more positive about the current financial situation, said Joseph Von Nessen, a research economist at the University of South Carolina’s Darla Moore School of Business.
“I think the economy overall is showing consistently stronger gains,” Von Nessen said. “What we’re seeing with the increasing consumer confidence index is simply a reflection of the fact that consumers are reacting as they observe the improving economy in their daily lives.”
In South Carolina alone, Von Nessen said the number of employed people has hit a record high and that the leisure and hospitality sector is seeing the most job gains, indicating a boost in consumer spending.
On a national level, the average price of recently sold homes is rising higher than a year or two ago, Von Nessen said.
“Consumers are willing to spend a bit more on a house now then they would have several years ago, which implies that they have more disposal income to spend,” he said. “And that they’re actually willing to spend it, which shows they’re seeing more stability in their eyes.”
Susy Allen, who owns Learning Express Toys in Evans, said customer traffic has dropped this summer as many regulars are on vacation. On the other hand, Allen said she’s noticed more out-of-town visitors shopping.
“The fact that more of our customers are opting to travel instead of having ‘staycations’ as in recent years is wonderful news for our economy,” she said. “We’re looking forward to brisk sales in the fourth quarter.”
Still, some residents aren’t quick to deem the economy’s recovery a success.
“I’m amazed that it’s hung on as it has,” said Reid Elam, as he loaded groceries into his SUV outside Costco at the Village at Riverwatch. “It ought to be a lot farther.”
Elam, of Millen, Ga., said he’s cautiously optimistic about the economy’s future, but added that the current economy wouldn’t keep him from making any big-item purchases, if necessary.
“I would go on and get it,” he said. “I wouldn’t feel like the sky is going to fall.”