Sequestration fears spook local consumers

Consumer confidence falls in first quarter after record high in last quarter of 2012

rboone@theolympian.comApril 16, 2013 

After Thurston County consumer confidence rose to a new high in the fourth quarter of 2012, it fell sharply in the first quarter of 2013 as a result of concerns about the federal government’s “sequestration,” the $85 billion in automatic spending cuts that are set to be phased in.

The first quarter data, which fell to 97 from a high of 129 in the fourth quarter, were released last week during the Thurston County Economic Development Council’s annual meeting and business recognition awards at the Red Lion Hotel Olympia.

Saint Martin’s University associate professor of business and economics Riley Moore, who introduced the data, has, along with business students at the school and the Thurston EDC, tracked and compiled consumer confidence data since the first quarter of 2008. Chief executive confidence data came later.

In that first quarter of 2008, consumer confidence stood at 100. It fell to an all-time low of 54 after the national economy collapsed in the fourth quarter of the same year, and has gradually climbed since then as the economy has shown improvement.

It wasn’t immediately clear why consumer confidence climbed to such a high of 129 in the fourth quarter of last year, although consumers may have been buoyed by the federal government’s efforts to avert the so-called “fiscal cliff.” Thurston County unemployment also fell to 7.4 percent in December.

In greater detail, here’s how consumers, chief executives and small business owners felt in the first quarter:

 • Forty-five percent of consumers still felt it was a bad time to sell a house, although that percentage figure is much lower than in past surveys, likely a reflection of an improving housing market. Thurston County home prices and sales have risen the past three months, according to Northwest Multiple Listing Service data.

 • Chief executive confidence results, which were based on a survey of 20 local CEOs, were essentially unchanged from the fourth quarter, falling to 58 in the first quarter from 59 in the fourth quarter.

 • Small-business owner confidence, which represents input from members of the Thurston, Lacey and Tumwater chambers of commerce, as well as the Olympia Downtown Association, also didn’t change much from the fourth quarter, rising to 62 from 60.

Consumers also ranked buying a car and buying a house as good in the first quarter, a continuing sign that good deals abound in a slower economy.

Rolf Boone: 360-754-5403 rboone@theolympian.com theolympian.com/bizblog

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