Consumer confidence across the state has jumped more than ten points since October as Arkansans are increasingly optimistic about their overall economic situation, according to the latest Arvest Consumer Sentiment Survey released Tuesday.
The current spring edition of the consumer sentiment index for Arkansas is 79.1, up from 68.1 in October and 67.4 in June 2014’s inaugural survey. The survey also includes consumers in Oklahoma and Missouri, including Greater Kansas City.
In Arkansas, the largest gains among consumers surveyed in March came from three specific areas. Among respondents with no children the index jumped from 59.7 in October to 92.9 in March. Among 18- to 24-year-olds, the index jumped from 92.4 in October to 113.0. Another notable increase – from 66.5 to 90.8 – came from Arkansans who are unemployed.
“Arkansas consumer sentiment jumped up dramatically from October 2014 to March 2015,” said Kathy Deck, economist at the University of Arkansas’ Sam M. Walton School of Business. “The state’s improving employment and income situation, along with lower gasoline prices at the pump, gave consumers a Director of the Center for Business and Economic Research boost in both perceived current conditions and near-term expectations.”
Despite the marked improvement, Arkansas still lags well behind the region and rest of the nation in regards to consumer optimism. The current regional index is 83.2, up from October’s index of 72.6. The national index, as reported by Thomson Reuters and the University of Michigan, was 85.3 for March, down from 86.9 in October.
Earlier this month, however, the rousing U.S. job market lifted U.S. consumer sentiment in April to its second-highest level since 2007 – the beginning of the Great Recession. Over the past five months, sentiment has been, on average, at its highest level since 2004.
According to Deck, lead economist for the survey and director of university’s Center for Business and Economic Research, the data for the survey showed less total dollar spend in the fuel category, while deposits in consumers’ checking and savings accounts generally have risen.
That reflects the fact that Arkansans, like the rest of the nation, are enjoying record low pump prices, increasing employment and slowly rising incomes in the past year. The improved readings on components of consumer sentiment in Arkansas were consistent with the positive economic data that have been reported.
For example, the average U.S. household is expected to spend about $700 less on gasoline in 2015 compared with 2014 as annual motor fuel expenditures are on track to fall to their lowest level in 11 years, according to the U.S. Energy Information Administration.
As of today, Arkansas drivers are paying on average about $2.40 for a gallon of regular unleaded, AAA statistics show. That, however, is 11 cents higher than two weeks ago as retailers are expected to continue ratcheting pump prices in advance of Memorial Day on May 25, the official beginning of the U.S. vacation season that runs through Labor Day.
Still John Womack, president and CEO of Arvest Bank in central Arkansas, said the improved consumer sentiment “is a sign that people are feeling better not only about their personal financial situation, but also have some confidence in the economy of the region as a whole.”
“As their confidence grows, they will feel better about buying needed items for their families and maybe taking on some personal debt. Knowing this helps us to prepare to meet their financial needs in a way that works best for them,” Womack added.
The Arvest Consumer Sentiment Survey is conducted by the Center for Business and Economic Research (CBER) in the Sam M. Walton College of Business at the University of Arkansas. The University of Oklahoma’s Public Opinion Learning Laboratory conducted the 1,200 random phone surveys. CBER, Missouri State University and Oklahoma City University provided state data analysis.
The survey is conducted twice annually and compiles three separate data sets. The next survey is expected to be completed in May 2015, officials said.
Information about the survey can be found at: www.arvestconsumersurvey.com.
