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University of Florida's confidence index near record low
By Palm Beach Business.com
DELRAY BEACH — The bottom dropped out of consumer confidence in August.
The University of Florida’s statewide consumer confidence index dropped 5 points from its July reading to 62 in August; the Conference Board’s national index dropped 10 point to 44.5 as consumers became more pessimistic about the economy short-term.
“The confidence index for August is now only three points above its record low of 59 from June of 2008,” UF Survey Director Chris McCarty said. “If past history of this index is any indication we are in, or at least very near, a recession. We are not likely to know this until the fourth quarter.”
Said the Conference Board’s Lynn Franco: “The index is now at its lowest level in more than two years. A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers' assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence."
McCarty said debt ceiling talks likely influenced the UF index as well. Confidence among senior citizens fell particularly sharply as Congress and others discussed changing Social Security and Medicare to reduce the national deficit. The lack of specifics about any proposals also unnerved seniors. The wild stock market swings that have marked Wall Street this month fueled further concerns.
“Over the next few months we do not expect consumer confidence to decline much further,” McCarty said. “While we are near record lows, as is the rest of the country, the economic circumstances are not anything like they were in 2008. At a certain point it becomes difficult for the index to go much lower.”
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