Poor jobs market sinks consumer confidence

By Palm Beach Business.com

DELRAY BEACH — By most measures, the economy is in much better shape than it was a year ago. The recession, at least in official terms, has ended; stocks are up; unemployment is up.

And that helps explain why consumer confidence is down. Way down this month compared to last.

The Conference Board’s national Consumer Confidence Index fell 10.5 points to a February reading of 46, its lowest point in 10 months. Meanwhile, in a separate report, the University of Florida said its confidence index for the Sunshine State fell 2 points this month to a reading of 72 — well within the range in which it has hovered for months.

"Concerns about current business conditions and the job market pushed the present situation Index down to its lowest level in 27 years,” said Lynn Franco, director of the Conference Board survey.  “Consumers also remain extremely pessimistic about their income prospects. This combination of earnings and job anxieties is likely to continue to curb spending."

Those stating that conditions are "good" decreased to 6.2 percent from 8.5 percent, while those stating business conditions are "bad" increased to 46.3 percent from 44.7 percent. Consumers' assessment of the labor market was also more pessimistic. Those saying jobs are "hard to get" rose to 47.7 percent from 46.5 percent, while those saying jobs are "plentiful" decreased to 3.6 percent from 4.4 percent.

It’s worth noting, however, that a year ago the confidence index sat at its all-time low reading of 25.

In Florida, consumers seem to be coming to terms that the state’s economy might not recover as rapidly as the rest of the economy, according to UF Survey Director Chris McCarty.

“Consumer confidence is being sustained at the upper 60s and lower 70s by those who have managed to keep their jobs during this recession,” McCarty said.  “This month, it is very likely that unemployment in Florida will top 12 percent.  It is hard to imagine how consumer confidence in Florida will make any substantial gains when unemployment continues to increase.

“If unemployment continues to remain above 10 percent through 2010, as is expected, consumer confidence and consumer spending are likely to remain anemic.”