No gains in Florida's consumer confidence as economic woes increase
GAINESVILLE, Fla. — Florida’s overall consumer confidence remained unchanged at 69 in December, but increasing pessimism about personal finances reflects the state’s worsening economic plight as housing prices fell and unemployment rose, according to a new University of Florida survey.
“Recently, Florida has had a little more bad news than good news,” said Chris McCarty survey director of UF’s Bureau of Economic and Business Research. “There are some indications that other parts of the country, particularly those areas surrounding Washington, D.C., are improving while Florida appears to be lagging the economic recovery. Some states are simply better equipped to benefit from the stimulus dollars; it is far from an equal distribution.”
The median price of a single family home in Florida declined over the past few months from a 2009 high of $148,000 in June to $139,000 in November, McCarty said. Last month’s home prices have fallen 12 percent below those of November 2008, he said.
To make matters worse, Florida’s unemployment rose to 11.5 percent in November, a larger gain than most economists expected, McCarty said. The increase comes at a time when the national unemployment rate actually declined, he said.
“There is a strong possibility that Florida’s unemployment could cause housing prices to decline even further as unemployed homeowners face foreclosure,” he said. “This does not bode well for consumer confidence, and therefore consumer spending, as we enter the new year.”
Most forecasts for retail sales before the holiday season called for sales to remain flat compared with last year, McCarty said. While that outcome would be considered quite weak in most years, retailers will probably be happy coming out of this season without a loss, he said.
“Most retailers chose to coast through this holiday season by keeping inventories low, trying to survive through 2010, when they hope consumer balance sheets will improve,” he said. “Some retailers will have trouble making it that long.”
Adding to Florida’s economic troubles is that while it and other states have received stimulus funds for unemployment and Medicaid payments, much of that help is scheduled to run out in 2010, leaving a large hole for the state to fill, he said.
An $8,000 tax rebate to first-time home buyers has been extended and a new rebate of $6,500 added for those who have owned a home for at least five years and plan to buy a new one, McCarty said. While these measures are likely to stimulate sales during the spring buying season and result in higher median housing prices, it is uncertain whether the economy will be on a more firm footing when those rebates run out in April, he said.
“With a $2.6 billion deficit looming and no clear indication as to how Florida’s economy will recover over the next year, 2010 could prove to be very similar to 2009,” he said.
Although none of the components that make up this month’s index changed dramatically from last month, there were some fluctuations, he said.
Perceptions of personal finances now compared with a year ago fell three points to 46, while perceptions of personal finances a year from now fell one point to 81, McCarty said. Also declining were perceptions of whether it is a good time to buy big-ticket consumer items, which fell two points to 76.
In contrast, perceptions of U.S. economic conditions over the next year rose two points to 67, while perceptions of U.S. economic conditions over the next five years rose three points to 75.
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 593 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.