Consumer confidence is moving in opposite directions, statewide vs. nationally, as new federal income tax rules come into play.
California consumer confidence fell in February for the second consecutive month to a six-month low, the Conference Board reported Tuesday, Feb. 27. The Conference Board’s consumer confidence index for California was 115.9, down from 131.5 in January but up from 113.3 a year earlier.
Meanwhile, U.S. shopper optimism rose for the second consecutive month to a 17-year high. Nationally, Conference Board’s consumer confidence index for February was 130.8 up from 124.3 in January and up from 116.1 a year earlier.
A retooling of federal income tax rules, approved by Congress and signed into law by President Donald Trump late last year, may trim the cash flow of many upper-middle-income property owners in California.
The new law that took effect this year, for example, limits tax breaks for state and local taxes — such as income and property taxes — to a $10,000 deduction for many households. In a costly state like California, that will cut take-home pay.
In February, California’s view of both current and future economic conditions dimmed vs. January, the Conference Board’s polling found.
Californians’ view of today’s business climate was down in February to 151.5 vs. 161.7 in January but up from 143 a year earlier. Californians’ view of future expectations was at 92.2, down from 111.4 the previous month and down from 93.5 a year earlier.
Californians were an outlier. In the seven other states tracked by the Conference Board, confidence rose in six states month-over-month and was up in all seven during the past year.
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