Ohio Consumer Confidence Drops in May

on receipt6-15-98
 (LO)

OHIO CONSUMER CONFIDENCE DROPS IN MAY, SHOWING UNCERTAINTY 

COLUMBUS -- Ohioans seem to be somewhat uncertain about the 
state of the economy, according to a new survey by researchers at 
The Ohio State University.

The Ohio Consumer Confidence Index fell just more than 1 1/2 
points in May, continuing a trend of slight gains and losses in 
the index this year.

The index rose from January to February, fell in March and 
rose again in April.

"We're seeing an increased sense of uncertainty over the 
economy which first surfaced last fall with the financial turmoil 
in Asia," said Lucia Dunn, professor of economics at Ohio State.

The index now stands at 103.0, down from its April value of 
104.6.

Values over 100 in the index are considered evidence of 
strong consumer confidence.  The index is compiled monthly by 
Ohio State's Survey Research Unit to gauge Ohioans' feelings 
about the economy.

Dunn said consumers' uncertainty about the economy has grown 
stronger in recent months because of the gyrating U.S. stock 
market and the possibility of higher interest rates from the 
Federal Reserve.

Ohioans' feelings about the economy mirror those of 
consumers across the country.  The two major national consumer 
confidence indices have shown similar up-and-down patterns.

Still, Dunn said the news is not all bad.  The Ohio index is 
still five points above its level one year ago in May 1997.  And 
the inflationary outlook of Ohio consumers continues to be good.  
The average expected rate of inflation for the next year among 
those surveyed fell to 3.1 percent from the April level of 3.4 
percent.

"If this expectation is borne out in coming months, it 
should ameliorate consumer and market fears that the Federal 
Reserve will act to raise interest rates as a move against 
inflation," Dunn said.

The survey showed that Ohioans' general expectations about 
economic conditions one year from now declined.  However, the 
long-term five-year outlook improved slightly.  "People are more 
uncertain about the immediate future, but not about the longer-
term future," she said.

Ohioans were less positive in May about current economic 
conditions.  For example, 10.1 percent of those surveyed in May 
said it is a bad time to make major purchases -- compared to only 
6.7 percent who said that in April.

In addition, 18.3 percent of those surveyed in May said 
their personal finances were worse off now than they were a year 
ago.  Only 14.1 percent said that in April.

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Contact:  Lucia Dunn, (614) 292-8071
Written by Jeff Grabmeier, (614) 292-8457