“Bubble Watch” digs into trends that may indicate economic and/or real estate market troubles ahead.

Buzz: California optimism is on the rise, with one confidence index index finishing 2021 with three-month winning streak.

Source: The Conference Board’s monthly polling of shoppers to create various consumer confidence indexes, including one for California.

The Trend

Let’s remember where we were in December 2020 — in the middle of a horrific spike in COVID-19 cases and deaths that iced the economy. This December, the state is early in another pandemic battle but has much — but not most — of its population vaccinated against the virus.

So the recent upswing in the overall statewide index to 121.6 in December — up from a revised 120.5 a month earlier and up from 66.1 a year ago — is only a mild surprise.

That’s a 1% one-month gain and a 84% gain from 2020’s pandemic-scarred ending. And note that California’s confidence index averaged 113 in the five years before the pandemic, so December’s mood is upbeat with a long-term lens, too..

Now let’s look at two measures inside the index …

Today? California consumers’ view of current conditions is the “meh” category. This yardstick scored 139.3 in December — down from 154.7 a month earlier but not surprisingly well above 56.1 from a year earlier. This measure averaged 141 in 2015-19.

Tomorrow? Shoppers see a better future in the next six months. The outlook index scored 109.8 — more optimistic than the 97.7 of the previous month and up from 72.7 a year earlier. This measure averaged 94 in 2015-19.

The Dissection

The Conference Board tracks the nation and seven other states — Texas, New York, Florida, Illinois, Pennsylvania, Ohio, and Michigan. How did California compare?

Overall confidence: five increases in a month in the other states; seven increases over the year. National? up for the month; higher over 12 months.

Current conditions: six increases in a month; seven increases over the year. National? down for the month; higher over 12 months.

Outlook: four increases in a month; five increases over the year. National? up for the month; higher over 12 months.

Arch-rivals? Texas’ overall confidence fell 3% in the month; increased 30% in the year. Florida? 5% one-month gain; 36% 12-month advance.

Another view

The Conference Board also asks consumers nationwide about their six-month expectations for the economy and plans to make major purchases in the next six months …

More jobs? 25.1% up from 22.8% in a month; down from 28.0% 12 months ago.

Buy a home? 7.5% up from 5.8% in a month; up from 6.0% 12 months ago.

Buy a vehicle? 11.9% up from 9% in a month; up from 9.8% 12 months ago.

Major appliance purchase? 50.8% up from 47.8% in a month; up from 48.3% 12 months ago.

And then there’s the latest unnerving trend, inflation. People polled expect the cost of living to be 6.9% higher in a year, down from 7.3% the month before and up from 6% a year earlier.

How bubbly?

On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … ONE BUBBLE!

One economic risk is a consumer overreaction to the pandemic’s fast-spreading omicron variant. This polling, taken earlier in the month, shows California shoppers with perhaps holiday-inspired hope.

Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com