UF Economists: Post-Election Optimism May Lead To Higher Holiday Sales

November 27, 1996

GAINESVILLE — Strong consumer confidence may translate into good holiday sales for retailers, say University of Florida economists.

The preliminary Florida Consumer Confidence Index for November edged down one point to 93 this month, but still is four points higher than a year ago, say economists with UF’s Bureau of Economic and Business Research.

“The four-point gain in our index from last Christmas season should please retailers, but the nature of the gain suggests caution,” said UF economist Dave Denslow. “Though consumers are in a good mood, the share saying that now is a good time for major purchases is the same as last year. Our index is higher than in November 1995 because women and retirees are more optimistic about the future of the country. Working-age men are not.

“The demographic profile of those who are more optimistic now closely matches the profile of groups who voted for Clinton,” he said. “The gain in confidence appears to stem from the election.”

With confidence strong, jobs and income up and the stock market soaring, Denslow predicts holiday sales in Florida will be 5 to 6 percent higher than last year. Stronger gains would be surprising, he said, because sales of cars and houses are flattening and families want to pay off their debts.

“Once in the stores, consumers will find pleasant surprises,” he said. “The world trade agreement that took effect in 1995 coupled with the rising value of the dollar overseas bring more variety and value in clothing and electronics. Sales of these goods should be strong.”

However, the share of respondents contemplating buying a car was 18 percent in

November, down from 23 percent a year earlier. The share considering buying a house was 8 percent, down from 10 percent a year ago.

Southeast Florida was the most optimistic of the three regions for which the survey

calculates results individually. It realized a two-point gain from October to 95. Elsewhere, consumer confidence fell by one point in both the Tampa and Orlando regions, to 93 and 96 respectively.

While southeast Florida showed a marked increase in perceptions of business activity compared with a year ago and future business conditions in the United States, expectations about future finances fell slightly.

Employed Floridians gave positive reports about business conditions for November. The share of respondents claiming business was higher than at the same time last year rose nine points to 56 percent. At the same time, the share who expect extra employees to be hired at their workplace over the next six months increased three points to 36 percent.

The Florida Consumer Attitude Survey is conducted every month by the bureau. Respondents are 18 or older and live in households telephoned through random digit dialing. The preliminary index for October was calculated from 883 responses. Numbers for prior months are based on about 1,000 responses. The margin of error for the index is almost three points. Regional results are subject to a sampling error of almost four points.

The index is patterned after the University of Michigan’s confidence index for the United States. Both indexes use 1966 as the base year. Numbers below 100 indicate consumers are less confident than they were in 1966.