UF: Consumer confidence in Florida falls in April, marking three-month trend
GAINESVILLE, Fla. — Consumer confidence among Floridians fell two points in April to 73 from the previous month’s revised figure of 75, marking a three-month decline, according to a monthly University of Florida survey.
All five categories measured by the survey dropped. Respondents’ overall assessment that their personal finances are stronger now than they were a year ago fell three points to 59. Their expectations of being better off financially a year from now fell four points to 78.
Respondents were modestly pessimistic over the economy. Their perceptions that the nation’s economy will improve in the coming year dropped one point to 72. Meanwhile, their confidence in U.S. economic conditions over the next five years also declined, dropping two points to 77.
Finally, perceptions, especially among those over 60, that now is a good time to buy big-ticket items, such as computers and automobiles, fell one point to 78.
“While we are in many ways repeating the pattern from last year, the levels of consumer confidence among Floridians are higher overall,” he said. “This time last year the index was at 68 compared with 73 this month. All five of the index components are higher than they were last year, although lower than last month.”
Income levels seem to have played a role in how survey takers responded in April. For example, confidence among those earning $30,000 or more a year dropped five points to 74. In contrast, those making less were optimistic. Their confidence level jumped up five points to 73.
The economic data that explains these differing results is mixed, McCarty said. For instance, unemployment declined by 0.4 percent between February and March to 9 percent, which closes the gap between Florida’s and the nation’s unemployment level of 8.2 percent.
“Although some of this decline was due to a decrease in the labor force, most of it comes from the addition of jobs,” McCarty said.
The sectors receiving the biggest recent employment gains are trade, transportation, and utilities instead of leisure and hospitality, which led hiring at the same time last year.
Another encouraging trend is that the median price of a single-family home rose in March to $139,000, an increase of $5,000 over February. In addition, although the stock market is down from last month’s highs, it is still holding onto gains since the beginning of the year.
However, rising gas prices may be discouraging Floridians. They rose over the past month by nearly 15 cents per gallon in Florida but fell three cents in the past week. “If gas prices continue to rise through the summer as they normally would, prices of other goods will ultimately go up as well as businesses will not be able to absorb the rising cost of manufacturing and transportation,” McCarty said.
Despite rising fuel costs, there are trends in Florida that could lift sagging confidence.
“If the employment situation continues to improve, that will raise confidence for a large number of Floridians,” McCarty said. “Continued gains in housing will also bolster confidence, although increased foreclosures and short sales may result in a decline in upcoming months.”
Any boost to confidence, however, could be offset in November, as Floridians focus on the elections.
“As we near the end of the year the economy will be front and center, and discussions of deficit-reduction will be rekindled,” McCarty said. “This will negatively impact many Floridians, particularly seniors.”
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 April 12-19 and reflects the responses of 400 individuals statewide.