Florida's consumer confidence keeps rising
GAINESVILLE, Fla. — Floridians’ consumer confidence rose three points to 79 in April — the second consecutive monthly increase, according to a new University of Florida survey.
“Many economists would have expected confidence to erode in April as the effects of the federal budget cuts known as sequestration along with the expiration of the payroll tax began to unfold,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “So far this has had virtually no impact on consumer confidence among Floridians, which is reflected in current sales tax collections.”
Florida’s mood is at odds with the national consumer confidence index, which as measured by the University of Michigan, dropped two points after recovering from a deeper slide in early April.
In contrast, four of the same five components used to determine Florida consumer confidence level increased and one remained unchanged in April. Respondents’ overall opinion that their personal finances are better than a year ago increased five points to 70, while their expectations they well be better off financially a year from now increased six points to 78.
Meanwhile, their trust in the U.S. economy rose three points to 80. They also were optimistic about national economic conditions over the next five years; that assessment rose one point to 77.
Left unchanged from March was whether now is a good time to buy big-ticket items such as cars and appliances. The response stayed at 90.
Not all Floridians, however, are optimistic. Confidence among Floridians making $30,000 a year or less dropped six points to 61 but rose four points to 85 for those earning more than $30,000.
Age could affect views, too. The overall confidence level of Floridians younger than 60 increased 10 points to 87, but it fell three points to 72 for those 60 and older.
“This difference may have to do with the unveiling of the Obama administration budget proposal that signaled a willingness to negotiate on aspects of Social Security and Medicare,” McCarty said. “Optimism, however, among those aged 60 and under is more likely fueled by economic improvements here in Florida.”
For example, Florida’s unemployment rate continues to drop, coming in at 7.5 percent for March, which is slightly less than the 7.6 percent national figure. Leisure and hospitality showed the biggest job growth of all Florida’s employment sectors. The construction industry also reports slow but positive growth.
Florida’s housing prices also continue to rise, with the median price now at $160,000. This is the highest median price since October 2008, though it is 38 percent lower than the peak value of $257,800 from June 2006. In addition, mortgage rates continue to be at historic lows.
Meanwhile, the stock market is still near record highs, bolstering retirement accounts for many Floridians, and gas prices have continued a steady slide.
Despite the encouraging trends, many economists still expect the effects of sequestration to be felt throughout the country, including Florida, but it may take months for the effects to be fully realized. Until then, “Floridians are increasingly optimistic,” McCarty said.
Conducted April 13-25, 2013, the UF study reflects the responses of 407 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 April survey can be found at http://www.bebr.ufl.edu/cci.