A survey gauging regional consumer sentiment shows Arkansans were more optimistic in October compared with earlier in the year, good news for retailers as they head into the key holiday shopping season.
The results released Tuesday of the Arvest Consumer Sentiment Index, which monitors consumer feelings in Arkansas, Oklahoma and Missouri, was 72.6 for the region, up from 71.4 in June. Arkansas consumers' confidence increased to 68.1, up from 67.4 in June; Missouri saw a big jump at 77.4, up from 68.6 in the summer; and Oklahoma saw a decline at 72.6, down from 76.4 in June.
This is the survey's first year, so data comparable to the year-ago period are not yet available.
Marc Fusaro, associate professor of economics at Arkansas Tech University's College of Business in Russellville, said October's findings highlight the stability of Arkansas' economy. He said Arkansas consumers' feelings haven't changed dramatically since June but showed a mild uptick, while Missouri and Oklahoma consumers showed rapid shifts of opinion, both positive and negative.
"If you don't see a drop off, it's good," he said.
The survey is similar to the national monthly Survey of Consumers, conducted by the University of Michigan for Thomson Reuters. The national index has a base value of 100.
That report's preliminary index of consumer sentiment stood at 86.9 in October, up from 73.2 for the same period last year. October's level was the highest since June 2007 and reflected improved personal finances and a favorable outlook of the overall economy by consumers, according to a release from the university.
Thanksgiving weekend traditionally is the biggest shopping weekend of the year. In 2013, 44.8 million shoppers hit the stores on Thanksgiving day, up 27 percent from 2012, according to the National Retail Federation. About 92.1 million shopped on Black Friday in 2013.
The federation is predicting a holiday sales increase of 4.1 percent this year. Sales in the last two months of the year often are as much as 30 percent of a retailer's total yearly sales.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said that in Arkansas the survey showed the most confidence was in the age 18-24 segment. It stood at 92.4 in October, slightly below Missouri at 93.9 but ahead of Oklahoma at 83.7. She said confident younger consumers are vital for strong sales.
"A lot of retailers look to the millennials as their next big hope," she said.
Deck said the index also showed the unemployed in Arkansas were feeling much more optimistic than others in the region. She said one explanation could be confidence in the overall job market -- that the long unemployed felt opportunities were greater and the recently jobless felt they'd soon land another job.
"That's not inconsistent with the type of job growth we've seen," Deck said.
In Arkansas, the consumer confidence index in October stood at 66.5 among the unemployed, down just slightly compared with 66.7 for employed workers. In the region, the index was 56.4 for those out of work compared with 75.8 for those with jobs. In Missouri, it was 59.1 for the unemployed compared with 77.7 for those with jobs. In Oklahoma there was not a large enough sampling to make a similar comparison.
The most recent Arvest survey was conducted between September and October and is typically released in three sections, with the consumer sentiment section the first in the series. Results are based on telephone interviews of 400 residents from each state. The survey findings will be released two times a year.
The survey is spearheaded by the Center for Business and Economic Research at UA's Sam Walton College of Business. The telephone surveys are conducted by the University of Oklahoma's Public Opinion Learning Laboratory. Missouri State University, Oklahoma City University, and Arkansas' Center for Business and Economic Research will evaluate the results for their states.
Information for this article was contributed by Chris Bahn of the Arkansas Democrat-Gazette.
Business on 11/19/2014