UF: Consumer confidence in Fla. falls in March, mimics last year's trend
GAINESVILLE, Fla. — Consumer confidence among Floridians fell two points in March to 74, repeating a trend seen last year, according to a monthly University of Florida survey.
“The pattern of consumer confidence from December to February was exactly the same as last year,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “In March 2011 confidence among Floridians fell four points to 72, and then kept falling through August coinciding with a pull-back in spending among Floridians. This month the decline was only two points, but still down.”
Three of the five categories measured by the survey showed a drop of confidence among respondents. For instance, their overall assessment of the strength of the national economy over the next year declined one point to 73, while their trust in U.S. economic conditions over the next five years sank six points to 75. Perceptions over whether the present is a good time to buy big-ticket items such as automobiles or refrigerators also fell, dropping four points to 79.
Survey takers, however, were not so gloomy in how they viewed their personal financial situations. Taken as a whole, their perception that they are personally better off financially today than they were a year ago increased three points to 62, a post-recession high. In addition, their expectations that personal finances will improve a year from now increased one point to 82.
Unrest in the Middle East and the Japanese earthquake helped to tamp down consumer confidence in the first quarter of last year, but rising fuel costs are fueling the current anxiety.
“The big drag on consumers will increasingly be gas prices, which have increased more than 15 cents a gallon in the past month,” McCarty said. Consumers, particularly those with lower incomes, will feel the impact which is expected to lead to lower confidence and perhaps less spending than was indicated in the January and February confidence surveys.
“The consequences of all this would be a pull-back in consumer spending which would certainly slow the recovery, although not reverse it,” McCarty said. There are also modest positive signs in the economy, McCarty said. Florida’s unemployment rate for January was down .3 percent from December to 9.6 percent. Economists disagree, however, over how much of this improvement is due to new job creation or a reduction in the labor force due in part to senior workers retiring.
McCarty said that the February preliminary employment report from the Florida Department of Economic Opportunity due for release March 30 is expected to help economists develop a better prediction of employment conditions for the remainder of the year.
Meanwhile, stock prices have kept their values as the Dow Jones industrial average continues hovering above 13,000, even though higher income respondents are pessimistic about their future finances, and recent trading volume on the New York Stock Exchange has been quite low, McCarty said.
Housing prices in Florida have stopped declining and even nudged up a little recently. For example, the median price of a single-family home for February was $134,000, matching the about same level in December 2011, which is higher than January’s $129,000.
McCarty also said further price declines are less likely for the moment, because the Florida Legislature did not pass laws to speed up the handling of approximately 368,000 potential foreclosures in Florida. In addition, a new arrangement between the federal government and the nation’s largest banks may stall further price declines, at least for the rest of the year.
The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
The UF survey was conducted between March 12 and 22 and reflects the responses of 415 individuals statewide.