By one measure, Californians got a surprising boost of optimism at the year’s end.
The Conference Board’s monthly consumer confidence index for the state took its largest one-month jump on record for December. This yardstick of shopper psyche, created by polls that run to mid -month, date to 2007.
My trusty spreadsheet found the California index jumped 48% between November and December, putting the index at a five-year high. This jump passed the old record upswing of 47% in April 2009, when the economy was first emerging from the depths of the Great Recession.
Curiously, December’s record surge followed a year-long decline to November. The 24% confidence drop following Donald Trump’s election to his second term put the index at its second-lowest point in five years.
While these California curves were happening, nationwide confidence slipped modestly in December – only 4% – putting the U.S. index at an eight-month low. Clearly, an eye-catching divide.
How did California suddenly get a dose of happiness while national angst grew?
Also, it wasn’t just California’s wild change of heart. California is one of eight states tracked by the Conference Board. Texas was up 11% for December.
Big drops in confidence were found in Pennsylvania, down 20%, Florida, off 19%, and New York and Michigan were 12% lower.
A fix?
Month-to-month gyrations are rarely insightful, but giant swings are hard to miss.
Conference Board economist Dana Peterson noted these state indexes have a history of statistical jumpiness.
My spreadsheet used standard deviation, a geeky measurement, to learn that California’s confidence index is 53% more volatile than the national benchmark. Only Texas was less jumpy, 38% above the nation. Ohio was jumpiest at 134% above the U.S. norm.
Peterson noted that tracking six months of indexes can smooth out the hiccups to show clearer patterns.
My spreadsheet, using that leveling tactic, found a more modest yet noteworthy year-end boost of California confidence.
December’s six-month average result was a 6% gain from November. Still, that ranks as the 13th largest one-month jump, by this measurement. It put California confidence at a seven-month high.
Using the same math, that year-end pop was a recovery from November – the lowest confidence level since December 2020. It had fallen 18% over the previous 12 months since Trump’s election.
The ‘why?”
Rising confidence, no matter the reason, is an economic positive.
If this is a true upswing, it could prove timely for the holiday shopping season. It could prove to be a boost for weak home and car sales. It might even convince bosses to goose their hiring plans.
But what might have changed California’s state of mind?
Politically speaking, November saw the long shutdown of the federal government ending, relieving some stress. Also, California voters approved Proposition 50, allowing the state to redo its congressional maps. That might embolden Democrats with potentially more House members opposing President Trump.
In economics, the government shutdown thinned the flow of economic data from the government. Did the missing statistics somehow soothe nerves?
The private industry figures that were reported in the interim offered a mixed bag of hope, at best.
Perhaps the mildly hopeful 2026 outlook from traditional year-end economic forecasts – with no one predicting a recession – bumped up confidence?
Or maybe we should wait a month or two to see if December is the start of some renewed California consumer confidence.
If the month was a statistical oddity, in hindsight, wasn’t worth thinking about too much.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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