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“Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.

Buzz: Californias consumer confidence is dropping fast.

Source: Conference Board

The trend[hhmc]

Junes California consumer confidence hit a 32-month low as the state index plunged 15% in a month to its lowest level since July 2016. The index is now 24% off its August 2018 peak.

Dissecting it[hhmc]

Whats to blame?

Politically speaking, its your choice. June marks the lowest reading of the Trump presidency. But the index is down 22% in 2019 — Gavin Newsoms first year as California governor — the worst six-month drop in seven years.

More pragmatically, these are tense times. Talk of possible wars — trade battles and military ones. Gyrating financial markets. And higher gasoline prices and tax bills.

Whats driving the California index lower are fading hopes for the economic future.

The California measure of financial expectations fell 18% for June to a low not seen since March 2013. Thats early in the economic recovery. This forward-looking subindex is now 28% off its January 2017 peak, the month when Trump took office.

Meanwhile, California consumers views of present conditions fell 13% for June to a 9-month low. This index is now 25% off its October 2018 peak.

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Now, this California angst is by no means unique. Junes national consumer index was down 7% to a 21-month low and is 12% off its October 2018 peak.

And five of the seven other states tracked by the Conference Board also saw declining confidence.

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Pessimism was growing in Florida (off 16% to a 7-month low); Ohio: (off 15% to a 21-month low); New York (off 10% to an 11-month low); Illinois (off 3% to a 9-month low); and Pennsylvania (off 1%).

Confidence rose in Michigan (up 8% but still off 4% in a year) and Texas (up 3% in the month but off 6% in a year).

Other views[hhmc]

Look at some regional confidence indexes …

Los Angeles County: The Claremont McKenna College consumer index for the first quarter hit its lowest point in its nearly four-year history.

Orange County: Consumer optimism has fallen for the eight of the last 10 quarters since a cyclical peak in 2016s third quarter.

Inland Empire: At the corporate level, 19% of purchasing managers polled by Cal State San Bernardino in May felt the local economy will become weaker vs. 4% a Read More – Source

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