UF Economists: Consumer Confidence Dips Amid national Economy Fears
GAINESVILLE — Concerns about the health of the national economy caused consumer confidence in Florida to slump in December, but conditions in the state remain strong and the outlook brighter than for the rest of the country, University of Florida economists report.
The index sagged three points from November to 97, said Dave Denslow, an economist with UF’s Bureau of Economic and Business Research, which conducts the survey.
“Although our overall index is down 10 points from its peak of 107 in May, it remains strong and points to continuing prosperity,” Denslow said. “Feeling secure about their jobs, paying less for many consumer goods and gasoline, refinancing their mortgages at lower rates and seeing the values of their investments rise, Floridians report their personal finances are strong.”
The personal components of the index — personal finances today compared with a year ago and expected personal finances a year from today — did not change significantly, which helped holiday sales, Denslow said. Floridians continued to report that now is a good time for major purchases, with that component of the index remaining at a high 121.
The survey component for expected national economic conditions during the next year dropped from 98 in November to 90 in December, and the measure for the nation during the next five years fell from 85 to 80.
The decline in expectations about the national economy continues a trend. The indicator for expected conditions during the next year fell 22 points since May, Denslow said.
“Things could have been worse,” he said. “If the economy expands in 1999, we may owe it to the independence of the Federal Reserve. In a year in which Washington’s level of trust sank so low that several legislators and pundits wondered aloud whether the president timed a military attack for political gain, Greenspan cut interest rates three times and no one questioned his motives.
“Florida’s economy should fare better than the nation’s in 1999,” he said. “The softest sector will be international trade in manufactured goods and agricultural commodities. Those are not the driving sectors in Florida’s economy. Low fuel prices and increased hotel capacity will help tourism, and low interest rates should put a floor under construction activity, in spite of scattered overbuilding. A major uncertainty is the stock market, important because of Florida’s large number of retirees.”
The bureau conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for November was calculated from 991 responses. Numbers for prior months are based on about 1,000 responses. The margin of error for the index is 3 percent.
Consumer confidence is designed to help predict buying patterns by measuring consumers’ mood toward buying. Although other economic indicators also are predictors of buying patterns, consumer confidence tends to be available sooner than those indicators, Denslow said.