UF: Rise in Florida’s consumer confidence
September 30, 2011
GAINESVILLE, Fla. – Sept. 28, 2011 – Florida’s consumer confidence index rose this month to 64, up three points from a revised mark of 61 in August. However, confidence still remains low, according to the University of Florida (UF) survey.
Of the five components used by UF researchers to measure overall confidence, four edged upward. Expectations that personal finances would rise in the coming year went up five points to 78, and consumer anticipation that the U.S. economy will improve in the coming year rose by one point to 52. There was also a four-point increase to 66 in the overall expectation that the country will see economic gains during the next five years. Confidence that now is a good time to purchase retail big-ticket items, such as laptops and cars, rose six points to 74.
“It is not surprising that confidence rose this month as we get further from the debt-ceiling debate,” says Chris McCarty, director of UF’s Bureau of Economic and Business Research and Survey Research Center, which conducted the survey. “Confidence actually rose this month among both younger and older respondents.”
The only component to show a decline in September was the perception that personal finances today are lower than a year ago. It fell by three points to 50.
According to the survey, Florida’s seniors, whose perceptions accounted for much of the decline in August, remain pessimistic about the economy in both the short and long run. Confidence levels of those over 60 are at “record lows,” McCarty says.
The ongoing national debate over spending cuts and entitlements is only partly responsible for sluggish confidence levels. Florida’s unemployment rate also remained stuck at 10.7 percent for the past three months. In addition, a loss of government jobs along with those in other sectors offset employment gains in a rebounding tourist industry. Moreover, tourism itself could face temporary setbacks if economic troubles worsen in Europe.
Other indicators also affect the perceptions of Florida consumers. The median price of an existing single-family home in Florida went up slightly in August to $137,500. A drop in gas prices since August was a typical market adjustment following Labor Day, McCarty says. Finally, a volatile stock market that sharply declined in July and took dramatic swings in August and September could also be taking a toll on confidence.
McCarty expects consumer confidence to remain lackluster until next year, given the looming deadline of Nov. 23 for the deficit reduction plan by the U.S. Congress’ super-commission. He thinks it will reignite debates over federal spending and again shake consumer confidence.
The UF survey measures the mood of consumers 18 or older, living in households, who were randomly telephoned Sept. 11-22. The preliminary index for September was collected from 410 respondents.
The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
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