Both business and consumer confidence improved during January, but businesses remained more optimistic, according to the latest monthly surveys from the Bureau of Business Research at the University of Nebraska-Lincoln.
“Businesses confidence about sales and employment rose in January,” said Eric Thompson, an economist at Nebraska who serves as the bureau's director.
The monthly Survey of Nebraska Business indicated that the state's business confidence index rose to 107.8 in January from a value of 105.7 in December 2016. Both values are well above the neutral level of 100, and indicate that business confidence is strong.
Consumer confidence, however, continues to lag.
The monthly Survey of Nebraska Households showed that Nebraska’s consumer confidence index rose to 89.2 in January from a value of 88.2 in December. While the index improved, it remained well below the neutral level of 100, indicating that Nebraska consumer confidence remains weak.
“Poor wage growth for working and middle-class households may be the reason that consumers continue to feel less confident than businesses,” said Thompson.
The surveys are sent each month to 500 randomly selected Nebraska businesses and households. During December, 139 businesses responded to the Survey of Nebraska Business, for a response rate of 28 percent. There were 127 respondents to the Survey of Nebraska Households, a response rate of 25 percent.
The Bureau has conducted a monthly survey of Nebraska business expectations since September 2011. Beginning with January’s results, those responses are being converted into a business confidence index format for ease of comparison with the consumer confidence index.
The bureau began producing its consumer confidence index in January 2016. It is based upon a survey that asks consumers whether they are better off financially and whether they think it is a good time to make large purchases.