UF: Floridians' overall confidence in economy stays on even keel
GAINESVILLE, Fla. — Floridians’ confidence in the economy held steady in February at 78, unchanged from the previous month, according to a new University of Florida survey.
“We expected little change to the February index given the agreement in Congress that averted another shutdown and debate over the debt ceiling,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research.
Respondents’ overall view that their personal finances are better today than a year ago fell five points to 61, while their expectations of being better off economically a year from now also sank five points to 75.
“We did not expect such a steep decline in perceptions of personal finances both now and in the future,” McCarty said. “It was particularly sharp among seniors, although both young and old respondents were pessimistic about their future finances. It’s not clear where this growing pessimism is coming from unless consumers are anticipating a rise in the cost of borrowing and lower home values.”
The survey also revealed Floridians’ confidence in the U.S. economy over the next year rose one point to 77, while their faith in it over the next five years remained unchanged at 81.
Their judgment over whether now is a good time to buy big-ticket items such as automobiles rose eight points to 94, the highest number since April 2007 just before the Great Recession began, McCarty said.
Along with the absence of political drama, a mixture of good and troubling economic news could help explain Florida’s unchanging confidence level. The state’s unemployment rate for Florida in December was 6.2 percent, down two-tenths of a percent from November and lower than the national 6.6 percent level. (February figures are not yet available.)
“While the unemployment rate was little changed, the number of jobs created was lower than expectations,” McCarty said, “perhaps leading to pessimism about job availability in the coming months.”
Meanwhile, the median housing price for an existing single-family home fell more than $10,000 in January to $162,500.
However, inflation and gas prices remained low. And although the overall stock market value fell by more than 7 percent in January, it regained much of that loss in February.
“We expect consumer confidence to remain near the current level for the next month or so as the economic picture remains somewhat predictable,” McCarty said. “There will be no budget debates, and the Fed will continue to pull back on its purchases of treasuries and securities. It will not likely raise the federal funds rate until next year.”
McCarty expects media attention on mid-term elections and the Florida governor’s race will likely have a greater effect on consumers’ views than national news, assuming there are no surprises.
The study reflects the responses of 399 individuals, representing a demographic cross-section of Florida, who were surveyed by phone Feb. 1-20.
The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
Details of the February survey can be found at http://www.bebr.ufl.edu/cci.
- John Dunn, firstname.lastname@example.org