Consumer confidence continues to free fall

Conference Board index

consumer confidence plummeting GAINESVILLE — If you thought consumer confidence had sunk about as low as it can go, you were wrong.

The University of Florida’s statewide consumer confidence index for May dropped one point to 65, only point above it lowest reading ever, reached nearly 17 years ago.

Meanwhile, the Conference Board’s national consumer confidence index fell more than five points to a reading of 57.2, its lowest reading in 16 years. The index has dropped more than 40 points since September.

“Last month I suggested that the stimulus checks might result in a temporary increase to consumer confidence in Florida,” UF Survey Director Chris McCarty said. “It does not appear that the stimulus checks have done much for confidence so far. Some of this is probably due to record gas prices, and increasing debt obligations.”

Meanwhile, Lynn Franco, director of the Conference Board Consumer Research Center, said the survey suggests that there is little likelihood that the economy will turn around in the coming months.

“Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers' confidence in the overall state of the economy,” Franco said. “Consumers' inflation expectations, fueled by increasing prices at the pump, are now at an all-time high and are likely to rise further in the months ahead.”

Those claiming business conditions are "bad" rose to 30.6 percent from 26.5 percent, while those claiming business conditions are "good" decreased to 13.1 percent from 15.4 percent last month.

Consumers' assessment of the job market was also more downbeat, while those anticipating business conditions to worsen over the next six months increased to 33.6 percent from 27.4 percent, while those anticipating business conditions to improve increased slightly to 10.4 percent from 10.1 percent in April.

McCarty said Florida’s turnaround will depend much on the housing market, when it bottoms out and when it finally recovers.

“Florida’s consumers are certainly in a tough spot,” McCarty said. “Housing prices are still declining. Worse is the confusion about when price declines will stop. We expect many Florida housing markets to bottom out by July, based on price declines so far. However, significant increases in housing prices are years away.”