UF survey: Florida consumers more optimistic than other Americans
GAINESVILLE, Fla. — Florida’s consumer confidence rose in March, gaining three points from the revised February reading of 73, according to a monthly University of Florida survey. That puts the Sunshine State at odds with the economic mood of the rest of the nation.
“This rise was unexpected,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. According to a recent University of Michigan study, the confidence level for the entire U.S. fell sharply by almost six points in the wake of federal budget cuts resulting from the sequestration process that started in early March.
“The fear has been that the combination of the payroll tax expiration and sequestration would dampen the recent growth in consumer activity,” McCarty said. “But Florida confidence is sharply out of line with that perception.”
In fact, four of the five components used in the survey went up from February. Respondents’ overall perception of being personally better off financially than they were a year ago went up four points to 68. “The last time that figure was reached was in 1992 after the 1990-91 recession,” McCarty said.
Floridians also were optimistic about bigger issues. For instance, their expectations that the U.S. economy would improve over the next year rose six points to 78. They also gave a thumbs-up to the nation’s economic health during the next five years by showing an increase in confidence of six points to 75. And their opinion that now is a good time to buy big-ticket items such as an automobile rose two points to 90.
The only hint of gloom appeared when survey-takers were asked if they would be better off financially a year from now. Here, their confidence sank two points to 72.
Floridians may have good reason to be confident. The state’s unemployment rate is now one-tenth of a percent lower than the national 7.8 percent figure, marking the first time this has happened since the start of the recession.
“While some of this is due to a decline in the labor force,” McCarty said, “there is no question that Florida has created jobs since the recession.”
Florida also is experiencing a strong housing market, with the median price of a single-family home hitting $150,000 in February. That was up almost 3.5 percent from January and 12.8 percent from last year. Some areas of Florida, such as Miami, are experiencing housing shortages, which is driving up prices, McCarty said.
An average drop in gas prices statewide of 15 cents-a-gallon during the past three weeks may be boosting confidence, too. The stock market also continues to reach new highs as the markets so far have shrugged off the effects of sequestration, McCarty said.
However, the Sunshine State’s upbeat mood may not last long.
“For now, Floridians don’t appear to see how the cuts are affecting them,” McCarty said. “While there are certainly some who have already been affected by sequestration, the real effects will start to be noticed in upcoming months as furloughs go into effect.”
Conducted March 13-21, the study reflects the responses of 416 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 March survey can be found at http://www.bebr.ufl.edu/cci.