Upstate consumer sentiment falls to lowest level in two years

The shutdown of the federal government, which lasted 16 days in October, was enough to sour consumers across upstate New York and reduce their willingness to spend money.

For the entire state, the confidence level dipped to its lowest point in nearly two years.

Consumer sentiment in upstate New York fell 6.5 points to 65.2 in October, according to the latest monthly survey the Siena (College) Research Institute (SRI) released Nov. 8.

Upstate’s overall-sentiment index of 65.2 is a combination of the current-sentiment and future-sentiment components. Upstate’s current-sentiment index of 73.1 is down 6.9 points from September, while the future-sentiment level decreased 6.3 points to 60.1, according to the SRI data.

The Upstate figure was 4.4 points below the statewide consumer-sentiment level of 69.6, which was down 6.6 points from September, SRI said.

At 69.6, the state’s consumer-sentiment level is at lowest level since December 2011, according to SRI.

New York’s consumer-sentiment index was 3.6 points lower than the October figure for the entire nation of 73.2, which was down 4.3 points from September, as measured by the University of Michigan’s consumer-sentiment index.

The shutdown of the federal government made October “like a month of two halves,” says Douglas Lonnstrom, professor of statistics and finance at Siena College and SRI founding director.

The shutdown lasted about half of the month, and consumer sentiment “went in the tank,” Lonnstrom says.

“We got a little bit of a bounce back after the government reopened [Oct. 17] and people weren’t worried about us defaulting on our bills … but certainly not enough to overcome that dismal first half,” he adds.

The SRI survey even found a decline in the consumer sentiment among New York’s various demographic groups.

They include men, women, higher income (annual salary of $50,000 or higher), lower income (annual salary of less than $50,000), under age 55, age 55 or older, Democrats, and Republicans.

“Every number on the board is negative this month,” Lonnstrom says.

For instance, the overall sentiment among older New Yorkers, women, and high-income consumers was down over eight points, according to the SRI data.

And for the highest-income consumers (those with annual salaries over $100,000), the current-confidence component dropped over 10 points.

“I can’t remember seeing a 10-point drop in one month,” he says.

When compared with the previous three years, the state’s overall-confidence sentiment of 69.6 is down 9.1 points from Oct. 2012, up 10.5 points from Oct. 2011, and has increased 3.7 points compared to Oct. 2010, according to the SRI data. The sentiment index measured 51.6 in Oct. 2008.

Besides determining consumer sentiment, SRI’s monthly survey also examines respondents’ plans for buying big-ticket items in the next six months.

In October, buying plans were down 0.3 points to 35.5 percent for consumer electronics; decreased 1.2 points to 22 percent for furniture; slid 0.6 points to 5.1 percent for homes, and fell 0.9 points to 16.4 percent for major home improvements. Buying plans remained unchanged for cars and trucks at 12.9 percent, according to the SRI data.

Gas and food prices

In SRI’s monthly analysis of gas and food prices, 59 percent of upstate respondents said the price of gas was having a serious impact on their monthly budgets, which is down from 71 percent in both September and August.

In addition, 51 percent of statewide respondents indicated concern about the price of gas, down from 57 percent in September, according to SRI.

Gas prices statewide have been a “bright spot,” Lonnstrom says, noting they’ve decreased, on average, between 20 cents and 30 cents in most places.

The percentage of Upstate respondents fell 12 points in October, and the percentage of New York respondents decreased six percentage points.

The figures still represent “significant” concern about gas prices, “but certainly a nice, big drop in one month,’ he says.

When asked about food prices, 67 percent of Upstate respondents indicated the price of groceries was having a serious impact on their finances, down from 71 percent in September. About 65 percent of statewide respondents expressed concern about their food bills, down from 66 percent in September.

SRI conducted its survey of consumer sentiment in October by random telephone calls to 750 New York residents over the age of 18.

As consumer sentiment is expressed as an index number developed after statistical calculations to a series of questions, “margin of error” does not apply.

Buying plans, which are shown as a percentage based on answers to specific questions, do have a margin of error of plus or minus 3.6 points, SRI said.

Contact Reinhardt at ereinhardt@cnybj.com

The shutdown of the federal government, which lasted 16 days in October, was enough to sour consumers across upstate New York and reduce their willingness to spend money.

For the entire state, the confidence level dipped to its lowest point in nearly two years.

Consumer sentiment in upstate New York fell 6.5 points to 65.2 in October, according to the latest monthly survey the Siena (College) Research Institute (SRI) released Nov. 8.

Upstate’s overall-sentiment index of 65.2 is a combination of the current-sentiment and future-sentiment components. Upstate’s current-sentiment index of 73.1 is down 6.9 points from September, while the future-sentiment level decreased 6.3 points to 60.1, according to the SRI data.

The Upstate figure was 4.4 points below the statewide consumer-sentiment level of 69.6, which was down 6.6 points from September, SRI said.

At 69.6, the state’s consumer-sentiment level is at lowest level since December 2011, according to SRI.

New York’s consumer-sentiment index was 3.6 points lower than the October figure for the entire nation of 73.2, which was down 4.3 points from September, as measured by the University of Michigan’s consumer-sentiment index.

The shutdown of the federal government made October “like a month of two halves,” says Douglas Lonnstrom, professor of statistics and finance at Siena College and SRI founding director.

The shutdown lasted about half of the month, and consumer sentiment “went in the tank,” Lonnstrom says.

“We got a little bit of a bounce back after the government reopened [Oct. 17] and people weren’t worried about us defaulting on our bills … but certainly not enough to overcome that dismal first half,” he adds.

The SRI survey even found a decline in the consumer sentiment among New York’s various demographic groups.

They include men, women, higher income (annual salary of $50,000 or higher), lower income (annual salary of less than $50,000), under age 55, age 55 or older, Democrats, and Republicans.

“Every number on the board is negative this month,” Lonnstrom says.

For instance, the overall sentiment among older New Yorkers, women, and high-income consumers was down over eight points, according to the SRI data.

And for the highest-income consumers (those with annual salaries over $100,000), the current-confidence component dropped over 10 points.

“I can’t remember seeing a 10-point drop in one month,” he says.

When compared with the previous three years, the state’s overall-confidence sentiment of 69.6 is down 9.1 points from Oct. 2012, up 10.5 points from Oct. 2011, and has increased 3.7 points compared to Oct. 2010, according to the SRI data. The sentiment index measured 51.6 in Oct. 2008.

Besides determining consumer sentiment, SRI’s monthly survey also examines respondents’ plans for buying big-ticket items in the next six months.

In October, buying plans were down 0.3 points to 35.5 percent for consumer electronics; decreased 1.2 points to 22 percent for furniture; slid 0.6 points to 5.1 percent for homes, and fell 0.9 points to 16.4 percent for major home improvements. Buying plans remained unchanged for cars and trucks at 12.9 percent, according to the SRI data.

Gas and food prices

In SRI’s monthly analysis of gas and food prices, 59 percent of upstate respondents said the price of gas was having a serious impact on their monthly budgets, which is down from 71 percent in both September and August.

In addition, 51 percent of statewide respondents indicated concern about the price of gas, down from 57 percent in September, according to SRI.

Gas prices statewide have been a “bright spot,” Lonnstrom says, noting they’ve decreased, on average, between 20 cents and 30 cents in most places.

The percentage of Upstate respondents fell 12 points in October, and the percentage of New York respondents decreased six percentage points.

The figures still represent “significant” concern about gas prices, “but certainly a nice, big drop in one month,’ he says.

When asked about food prices, 67 percent of Upstate respondents indicated the price of groceries was having a serious impact on their finances, down from 71 percent in September. About 65 percent of statewide respondents expressed concern about their food bills, down from 66 percent in September.

SRI conducted its survey of consumer sentiment in October by random telephone calls to 750 New York residents over the age of 18.

As consumer sentiment is expressed as an index number developed after statistical calculations to a series of questions, “margin of error” does not apply.

Buying plans, which are shown as a percentage based on answers to specific questions, do have a margin of error of plus or minus 3.6 points, SRI said.

Contact Reinhardt at ereinhardt@cnybj.com