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University of Florida survey finds consumer confidence rising
By Palm Beach Business.com
DELRAY BEACH — Consumer confidence surged nationally in December while posting solid gains in Florida, according to separate reports released Tuesday.
The Conference Board’s Consumer Confidence Index rose to 64.5 in December from 55.2 a month earlier, while the University of Florida’s index for the Sunshine State moved 3 points higher to a reading of 69. Perceptions of an improved job market helped boost both indexes.
"After two months of considerable gains, the Consumer Confidence Index is now back to levels seen last spring,” said Lynn Franco, director of the Conference Board Consumer Research Center. “Looking ahead, consumers are more optimistic that business conditions, employment prospects, and their financial situations will continue to get better. While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes."
Said Chris McCarty, director of the UF survey: “Floridians are most likely optimistic about continued improvement in the employment situation. The large increase in perceptions of buying conditions reflects big discounts from retailers for the holidays and very low interest rates for mortgages. Contrary to our prediction, the impasse of the Super Commission regarding deficit reductions came and went with very little concern from consumers.”
In the Conference Board survey, the percentage of consumers saying business conditions are "good" increased to 16.6 percent from 13.9 percent, while those stating business conditions are "bad" declined to 33.9 percent from 38.0 percent.. Those stating jobs are "plentiful" increased to 6.7 percent from 5.6 percent, while those claiming jobs are "hard to get" decreased to 41.8 percent from 43.0 percent.
Consumers' short-term outlook also improved in December. The proportion of consumers expecting business conditions to improve over the next six months increased to 16.7 percent from 13.7 percent, while those expecting business conditions will worsen declined to 13.4 percent from 16.1 percent.
McCarty noted that there have been many positive signs of improvement in the Florida economy, the biggest of which is a reduction in the jobless rate, which fell .4 percent in November to 10 percent. Gasoline price have fallen and home prices seem to have bottomed out. Meanwhile stocks generally have held their values despite severe mood swings brought on by the oscillating news on European debt crisis.
“U.S. consumers are likely immune to media reports from Europe and budget issues herein the U.S.,” McCarty said. “None of these issues has resulted in real consequences for Floridians yet. “At some point Congress will have to contend with required cuts of $1.2 trillion from the debt ceiling deal, and given tensions in Congress and the fact this is an election year it is less likely that those cuts will be dismissed.
“Budget cuts at the federal level will trickle down to some Floridians. Given the current make-up of the Florida jobs report, December is likely to be favorable, whether increased employment is due to holiday hiring or not. The question remains whether those job gains will be sustained through January.”
