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CALIFORNIA: Consumer confidence index shows a slight increase, according to a quarterly survey. – By TIFFANY RAY – The Press-Enterprise

Californians are feeling better about the economy than they were a few months ago, but they continue to hold back on big-ticket spending, according to a recent survey by Chapman University.

Increasing optimism here comes despite stagnating consumer sentiments nationally, a similar report showed.

Chapman’s quarterly survey of consumer confidence registered a California consumer confidence index at 82.7 for May, up from 81.1 in February. It’s the third consecutive increase since August 2009, when the consumer confidence level was 69.2.

Survey: Californians buck the U.S. trend in consumer confidence.

Still, an index score of 100 means there is an equal percentage of consumers who are optimistic about the economy to consumers who are pessimistic about it, so a score below 100 indicates that most consumers are still skittish about the economy.

Nationally, consumer confidence was stagnant between February and May, according studies by the University of Michigan. Nationally, consumer sentiments were improved in May over last summer, but the Chapman survey indicates improvement has been more dramatic in California.

Chapman economist Esmael Adibi said recent data suggest home prices are starting to improve, and that could be contributing to Californians’ rising optimism. The state’s housing market took a disproportionate hit during the recession, he said, but “that should disproportionately help us when prices come back.”

Still, Adibi cautioned that, although confidence is improving, there are still more pessimists than optimists. “It is still below what it should be,” he said.

Consumers were far more confident in the future than in what’s happening currently, the Chapman survey showed. Sentiments about the current economy registered at 66 on the May index. By comparison, the outlook for future economic conditions hit 105.1.

The survey’s consumer spending index fell in May to 71.4, from 89.6 in February, meaning fewer respondents said they were planning to buy expensive items such as cars and washing machines.

Similarly, a quarterly forecast from the Marcus & Millichap real estate firm predicted retail spending will remain soft in the Inland region despite some improvement in the economy overall. Auto industry retiree Chuck Neal said things are getting worse: Small businesses can’t get loans, and people aren’t spending money because they are still afraid of losing their jobs.

Cindy Monahan, a Mentone resident who works in a Riverside dental lab, said things aren’t going to get better until people have jobs.

“I know people who are in houses who haven’t made a payment in two years,” Monahan said.

Nancy D. Sidhu, chief economist with the Los Angeles County Economic Development Corp., said there are “a number of interesting cross-currents going on where consumer sentiment is involved.”

People are reminded each month that unemployment remains high, Sidhu said. But other measures economists follow are showing signs of recovery.

Container traffic in and out of ports and Inland warehouses has increased, in some cases dramatically, Sidhu said. And auto sales, although “nothing to write home about yet,” are mostly better than they were a year ago, she said.

Nationally, retail sales have improved, a sign that people who still have jobs have stopped being afraid, Sidhu said.

“That, I think, is the key,” Sidhu said. “Last year there was an enormous amount of fear, and people weren’t quite sure how to handle this deep recession we were in.”

Reach Tiffany Ray at 951-368-9559 or at tray@PE.com

So I’m curious… after all this, where to you think the economy is and where do you believe that it’s headed? Stay tuned.