UF Survey: Florida Consumer Confidence Unaffected By Elections
GAINESVILLE, Fla. — Florida’s consumer confidence was unaffected by the elections, remaining unchanged in November for the third month in a row, a sign that holiday retail sales are likely to be modest, University of Florida economists report.
The overall preliminary index remained at 93, which is one point lower than it was a year ago. Three of the survey’s five components rose from last month.
The biggest increases were a six-point rise to 87 in perceptions about personal finances now compared with a year ago and a four-point increase to 109 in perceptions about whether it is a good time to buy big-ticket items. Perceptions of U.S. business conditions over the next year rose one point to 88.
Those increases were balanced by a seven-point decline to 85 in perceptions about the U.S. economy over the next five years and a two-point decline to 99 in perceptions about future personal finances.
“It’s interesting that the overall confidence index remained stable throughout this election process,” said Chris McCarty, director of the survey research center at UF’s Bureau of Economic and Business Research where the research was conducted. “In fact, overall consumer confidence has been very stable in Florida over the past year, fluctuating between a low of 93 and a high of 97. In contrast, the past presidential election saw much more volatility with a low of 103 and a high of 111.”
Consumer confidence is considered moderately high at 93, which likely means the holiday shopping season will not be a boon to retailers, McCarty said.
“Many economists are forecasting a modest holiday season,” he said. “Much of the disposable income available earlier in the year came from tax cuts and refinancing. That money is now spent, and consumers must put up with rising interest rates and higher fuel costs. While credit card sales over the weekend were high, often signaling strong holiday sales, Wal-Mart’s November sales were far below expectation, raising doubts about a retail season.”
Households making less than $30,000 registered a five-point loss in overall confidence, to 78, compared with those making more than $30,000, which gained six-points, to 91, McCarty said. Differences were even greater in the component measuring personal financial situation now compared with a year ago, which fell from 62 to 53 for the lower income group and rose from 91 to 106 for the higher income group, he said.
Wal-Mart’s “bread and butter” shoppers are people with low incomes who are more affected by rising costs in gasoline and heating oil than those with higher incomes, and they don’t have the additional income from tax refunds that they had last year to spend, he said.
“People who make moderate-to-high incomes may not have to make the same decisions about whether to put presents under the tree or pay their heating bill or put gas in their car to make it to work,” he said. “However, low-income households will have to make those trade-offs.”
The research center conducts the Florida Consumer Attitude survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for November was conducted from 458 responses. The error rate is plus or minus 5 percent.
Consumer confidence is designed to help predict buying patterns by measuring the mood of consumers toward purchasing. Although other economic indicators also predict buying patterns, consumer confidence tends to be available sooner.
The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The value of the index is in comparing changes over time rather than looking at an isolated month.