UF: Consumer confidence in Florida drops four points in June
GAINESVILLE, Fla. — Consumer confidence among Floridians sank four points this month, after jumping four points to 78 in May, according to a University of Florida survey.
“In June Floridians reversed their optimism about their future finances,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “The decline was across age and income groups and did not reflect a specific policy change.”
In fact, there have been recent positive trends in Florida’s housing and job market, he added.
For the first time since February, all five components used to measure confidence declined. For example, perceptions of survey takers that they are better off financially now than they were a year ago fell one point to 61. Meanwhile, their overall expectations that their personal finances will improve a year from now fell 10 points to 86.
Respondents were also glum in their assessment of broader issues. Their confidence in the national economy over the coming year dropped three points to 73, while their trust in the national economy’s prospects for the next five years fell four points to 84. Floridians’ confidence in whether now is a good time to buy big-ticket consumer items, such as televisions and automobiles, also fell, dropping four points to 78.
In May, consumer confidence was largely buoyed by perceptions that personal finances would improve. Such thinking “was likely due to the dramatic drop in gas prices between April and May, a decline of more than 50 cents a gallon,” McCarty said.
Although gas prices have continued to fall since then, the associated optimism may have slowed in June, McCarty said, because of increased news coverage about expiring tax cuts and automatic budget cuts in January that could disrupt the economy.
Also dampening confidence was a Federal Reserve analysis this month that found household wealth had eroded to 1990s levels. This discouraging news may have erased the short-term positive effects of lower gas prices, McCarty said.
Despite the gloom expressed in the report, Florida experienced positive economic indicators in May and June. Florida’s unemployment rate declined .1 percent to 8.6 percent in May, the lowest level since the recession ended in June 2009, while the U.S. rate edged up .1 percent to 8.2 percent in May.
There were also big employment gains in Florida’s professional and business services sectors, which increased by 2.4 percent or 24,900 jobs, McCarty said. The only sectors to lose jobs were construction and government.
Another promising trend is that Florida’s improving unemployment numbers are not the result of a decreased state labor force, which was the case earlier in the year.
There is still more good news. Stock market values are up, and so are housing prices, which have been slowly recovering since January. The median price for a Florida house is now $147,000, the highest since August 2009. Short sales now account for more sales than foreclosures.
“Fortunately gas prices are expected to continue to decline, although at a slower pace, in the next few months,” McCarty said. “This should help to maintain confidence somewhere near its current level.”
Conducted June 12-21, the UF study reflects the responses of 409 individuals who represent a demographic cross-section of Florida.
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.
Details of the June survey can be found at http://www.bebr.ufl.edu/cci.