UF Survey: Consumer Confidence Steady Despite Election Uncertainty

November 29, 2000

GAINESVILLE, Fla. — Despite the contested presidential election and intense volatility in the stock market, consumer confidence in Florida remained steady in November, boding well for holiday sales, University of Florida economists said today.

The preliminary index for November registered 104, unchanged from October and only one point higher than at the same time last year, said Chris McCarty, survey director for UF’s Bureau of Economic and Business Research.

“Many retailers have expressed concern over the upcoming shopping season,” McCarty said. “Based on consumer confidence, I think many of their worries are unfounded. Although consumers may not follow the old model of early shopping, favoring last-minute shopping and post-holiday sales, I think retailers will do just fine when they tally their sales after January.”

The survey showed slight downturns in the perceptions of short-term economic conditions in the United States and long-term personal finances were offset by slight increases in perceptions of U.S. business conditions in the long term and improvements in personal financial status now compared with last year.

“There is a temptation to assume that consumers will react unfavorably to the stalled election process,” McCarty said. “While there may be some pessimism about that, most people react to things that affect them directly and more immediately, like inflation and job availability.”

The volatility on Wall Street is less a reaction to what is happening in the Florida recount than what is happening in earnings reports from some of the nation’s top businesses, he said.

The Federal Reserve’s efforts to slow the economy by increasing interest rates have affected earnings, as have increased gas prices, McCarty said. While there is some day-to-day reaction to news about the election, most of the movement in the stock market this past month was to be expected with the Fed’s efforts to slow the economy, 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 November was calculated from 741 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.