UF: Florida's consumer confidence unchanged for December
GAINESVILLE, Fla. — Florida’s consumer confidence remained unchanged in December, according to a monthly University of Florida survey. December’s figure was 74, the same as the revised November reading. Overall confidence reached a post-recession peak in September and October at 80, but is down six points for the second month.
Political ideology strongly influenced Floridians’ economic outlook, according to Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research.
“In November there was a clear reaction to the outcome of the election with confidence among Democrats increasing and confidence among Republicans decreasing,” he said. “In December that is still true with confidence among Republicans at 49 and among Democrats at 103, about the same as November.”
Age also affected survey results. Confidence among those under 60 increased two points while confidence for those 60 and over declined one point. “This difference by age is even more pronounced when looking at expectations about personal finances a year from now,” he said.
Worry about the fiscal cliff in the federal budget was another factor. This is mostly reflected in growing pessimism about the next year, both in perceptions of personal finances and expectations about the economy, he said. For example, the survey indicates that respondents’ overall expectation that personal finances will be sound a year from now dropped two points to 75, although perceptions of personal finances now compared to a year ago rose four points to 61. Meanwhile, their confidence in the U.S. economy over the coming year fell six points to 73.
“However, consumers appear to see past the short-term pain of the tax increases and spending cuts and are a little more optimistic about the future over the next five years,” McCarty said. That figure rose one point to 78. In addition, the perception that they are better off economically today than a year ago rose three points to 61.
Finally, the survey-takers’ assessment that the present is a good time to buy big-ticket items, such as a washing machine, rose six points to 84.
Signs of economic recovery in Florida, meanwhile, remain strong. The median price for a single-family home rose in Florida to $150,000 in November, up from $145,000 in October. Housing sales are brisk in most markets.
The state’s unemployment level fell again in November by .4 percent to 8.1 percent, marking the lowest level since the recession ended. The gap between Florida and U.S. unemployment is now only .4 percent.
“This is a big improvement from the 1.8 percent gap from February of 2011,” McCarty said.
Unlike previous months, the November decline in Florida unemployment figures was not mainly the result of a decline in the labor force. The labor force did not decline in November, although it did not increase either. There was an increase in jobs, particularly those related to tourism, McCarty said.
Declining gas prices and a resilient stock market offer even more good news. All these positive trends indicate that state revenues may be higher than estimated for the first time in years.
“Most economists believe that without the fiscal cliff the economy is on a solid path to recovery,” McCarty said. But the recovery will be jeopardized if Congress allows scheduled tax increases and spending cuts to occur.
If that happens a resulting decline in consumer discretionary could mean fewer Florida vacations. McCarty foresees even more economic setbacks for Floridians such as a delay in tax refund checks and less take-home pay as employers increase withholding to reflect the end of Bush and payroll tax cuts. Seniors could also have trouble getting medical attention if Medicare is cut 27 percent.
“The effects would be most pronounced around cities with military bases, such as Pensacola, Jacksonville and Tampa,” he said.
Conducted Dec. 1-18, the UF study reflects the responses of 400 individuals, representing 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 December survey can be found at http://www.bebr.ufl.edu/cci.