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European economics cast shadow on Florida's consumers

By Palm Beach Business.com

DELRAY BEACH — A drum beat of bad news coming from Europe and Washington has put Floridians in a less optimistic mood, according to the University of Florida’s consumer confidence index for June.

The UF index dropped four points to a reading of 74.

Meanwhile, the Conference Board also found consumers more pessimistic about the economy’s near-term prospects as its national consumer confidence index dropped 2.4 points to a June reading of 62.

Both reports were released Tuesday.

UF survey Director Chris McCarty said the decline in optimism was across all ages and income groups as negative news on the state of Europe and the prospect for a budgetary crisis in Washington off set positives that include lower gas prices, lower unemployment and a nascent recovery in the housing market.

McCarty, however, doesn’t see June’s decline turning into a trend.

“Much of the decline in June is likely due to a change in perception based on recent news releases,” McCarty said.  “In addition to increased coverage of the impending fiscal challenge in January, a Federal Reserve analysis in early June of data from the 2010 release of their Survey of Consumer Finances reported that household wealth had eroded to levels from the 1990s. 

“These long-term views may have erased the short term positive effects of lower gas prices.  Fortunately gas prices are expected to continue to decline, although at a slower pace, in the next few months.  This should help to maintain confidence somewhere near its current level.”