UF Survey: Uneasiness About Election Dampens Consumer Confidence

October 31, 2000

GAINESVILLE, Fla. — The Florida Consumer Confidence index plunged five points in October, reflecting election jitters and a heightened focus on the economy in presidential politics, University of Florida economists said today.

The preliminary index for October slumped to 104 from 109 in September, which in turn was a three-point drop from August, said Chris McCarty, survey director for UF’s Bureau of Economic and Business Research.

“Although consumer confidence in Florida is still quite high, the drop between September and October is significant,” he said. “Once again the source of the decline was an increase in pessimism about the U.S. economy over the next year. This may be due in large part to election jitters and the attention the economy has received in the flood of campaign advertisements.”

Most of the drop in confidence came from perceptions about economic conditions in the United States during the next year and whether it is a good time to buy expensive consumer items such as cars and appliances that often are purchased on credit, McCarty said. The decline in confidence was particularly large for households making annual incomes of more than $30,000, he said.

Retail sales data for Florida and the nation suggest that consumers are still reasonably confident, though, McCarty said. Sales were brisk in the first quarter of this year, and after a minor slowdown in the second quarter, indications are that consumer spending is picking up again, he said.

“Although down from its August peak, our index remains slightly above October 1999,” said UF economist Dave Denslow. “Floridians are more optimistic now about the future of the national economy. While holiday sales might still be strong, higher energy prices have dampened buying plans a bit this year, which points to slightly slower growth of total sales from 1999 to 2000, contrasted to 1998 to 1999.”

The results come at an interesting time, given the close presidential race in Florida, McCarty said.

While optimism about the economy usually translates into positive results at the polls for incumbent vice presidents, that does not seem to be the case in this election, McCarty said. According to polling done during the October survey, Al Gore and George Bush are evenly split among Florida’s voters, he said.

“The strong economy does not seem to be much of an asset for Al Gore as it normally would be,” he said.

The bureau conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for October was calculated from 466 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.