Consumer sentiment ratings by regional consumers dropped significantly in the fourth quarter, down 14.7%, according to the preliminary report released Jan. 4 by the Center for Business Research and Economic Development at the University of Arkansas at Fort Smith.
The Index of Consumer Sentiment (ICS) for the Fort Smith region was 52.2, down from the third quarter result of 61.2.
The University of Michigan survey, which measures national sentiment, reported a 72.9 for December. This was nearly 7% lower than September. Index scores below 100 reflect less optimism about the economy than scores above 100.
The report revealed that area consumers were particularly negative toward future prospects for the national and regional economy, where scores for consumer expectations going forward dropped over 21.3 % from the previous quarter.
“Regional sentiment reversed its uptrend of the past few quarters in a significant way in this report,” stated Kermit Kuehn of Fort Smith, center director. “While it hasn’t been particularly strong before, it bordered on downright ugly this time.”
Arvest Bank President Craig Rivaldo concurred.
“When you have a continuous stream of negative news coming out of Washington, it’s bound to impact the regional consumer in a significant way – and not always for the better,” said Rivaldo.
Kuehn said the Index for Consumer Expectations (ICE), which measures consumer feelings about future economic conditions, was down a “whopping” 21.3%, recording a 48.5, and was in line with double-digit declines observed in the University of Michigan survey.
Kuehn said regional consumers were not optimistic that recent elections would improve the regional or national economy. He said nearly 70% of respondents believed the national elections would make things worse going forward into 2013.