UF Survey: Florida Consumer Confidence Hits Lowest Point In 20 Months
GAINESVILLE, Fla. — After remaining steady for three months in a row, Florida’s consumer confidence tumbled four points in December, possibly because of older residents’ anxiety over presidential discussions about overhauling Social Security, University of Florida economists report.
The overall preliminary index dropped to 89, its lowest level since April 2003.
The biggest declines came in three components: a nine-point plunge to 91 in perceptions of personal finances a year from now, an eight-point drop to 80 in perceptions of short-term business conditions, and an eight-point drop to 101 in perceptions of whether it is a good time to buy big-ticket items.
Those declines were balanced by modest increases in perceptions of current personal finances, which rose one point to 86, and perceptions of long-term U.S. business conditions, up two points to 87.
“The overall index for Florida is now seven points lower than it was a year ago,” said Chris McCarty, director of the survey research center at UF’s Bureau of Economic and Business Research, where the research was conducted. “Much of this perception is widespread across age and income groups.”
There was a particularly sharp decline in perceptions of future finances among Florida’s seniors, however, McCarty said. That component fell 19 points to 67, its lowest level since October 1993, perhaps reflecting talk in the media about President Bush’s plans to overhaul Social Security, he said.
“For many of Florida’s seniors, Social Security represents their primary, if not their only, source of income,” he said.
The decline in Florida’s consumer confidence is at odds with national consumer confidence as measured by the University of Michigan, which rose 4 points to 97, despite Florida having a better record of job gains than most states, McCarty said.
“This lends more support to the theory that the decline is mostly due to anxiety over the effect of policies, such as the overhaul of Social Security, rather than tangible negative economic effects experienced by consumers at the moment,” he said.
UF’s survey is modeled after the University of Michigan survey, using exactly the same questions, unlike a national consumer confidence survey done by the Conference Board in New York, which uses different questions than UF’s survey, McCarty said.
“When we go in a different direction from the Michigan survey, it’s really saying there is something different between Florida and the rest of the country,” he said.
The slide in consumer confidence comes during a holiday shopping season that started off slowly but has gathered steam, he said.
The weekend following Thanksgiving was disappointing for some retailers, although recent chain-store sales data show shopping has picked up, McCarty said. Combined with trends in recent years for shopping seasons that extend beyond Christmas Day, the increase likely will be enough to rescue retailers and result in a moderate gain of 4 percent to 4.5 percent over last year, he said.
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 December was conducted from 442 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.