June 30, 2009 - GAINESVILLE, Fla. — Florida’s consumer confidence fell three points in June to 68, possibly because of new and increased state fees for residents, General Motors’ bankruptcy and a spike in Florida’s unemployment rate a new University of Florida survey finds.
The index components were mixed, with perceptions of personal finances now compared with a year ago up three points to 44 from a revised May reading of 41 but still near historical lows. All others were lower than or the same as last month.
Perceptions of personal finances a year from now fell six points to 84, and perceptions of U.S. economic conditions over the next year fell seven points to 65 — it was 51 at this time last year. Perceptions as to whether it is a good time to buy big-ticket items fell nine points to 67. Finally, perceptions of U.S. economic conditions over the next five years remained unchanged at 80.
“In the previous two releases we had suggested the possibility of a small decline in confidence in June, which seems to have been the case,” said Chris McCarty, director of UF's Survey Research Center at the Bureau of Economic and Business Research. “This is most likely a combination of the fallout from the Florida state budget, which includes several new and increased fees, as well as the bankruptcy of GM.”
Another factor affecting the decline is a sharp increase in Florida’s unemployment rate. A previous unemployment release from the Agency for Workforce Innovation showed a slight decline, but that has since been erased by an increase into double-digit unemployment, he added. Florida’s seasonally adjusted unemployment rate for May 2009 was 10.2 percent, according to the agency.
“Most economists believe unemployment will continue to increase as the economy moves into recovery,” McCarty said.
The economic landscape in Florida remains mixed. On the negative side is high unemployment and continued foreclosures, although the rate of foreclosures in Florida may already have peaked, McCarty said. Gas prices have increased dramatically over the past month, although there are signs that may be reversing.
On the positive side, the Florida Association of Realtors report for May once again showed signs that the median price of existing homes is stabilizing. Since January, the median price has fluctuated in a narrow range and is now up for the year at $144,400. It is increasingly likely that Florida has taken most of its knocks to housing value, even as other states continue to decline, McCarty said.
“Moving forward, we do not expect Florida consumer confidence to decline much more over the next couple of months, barring some unforeseen change here in Florida or nationally,” he said. “There is at least a temporary reaction of the stock market to some recent news, including Iran and dramatic increases in mortgage and credit card delinquencies. So far, this volatility is relatively small and not indicative of a reversal in the economic recovery.”
However, McCarty cautions that everyone should expect the recovery to be long and uneven for some sectors of the economy.
“With the demise of longstanding financial institutions such as Lehman Brothers and manufacturing companies like Chrysler and GM, it is no longer business as usual,” he said. “The U.S. is clearly going to share more of the global economic pie than it has in the past.”
The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for June was conducted from 430 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.
Source: Chris McCarty Writer: Ron Wayne
Source: University of Florida Press Release
Note from John Elwell: This information seems to mirror a press release from The Conference Board that was also released on June 30, 2009 that showed that consumer confidence nationwide had also decreased in June after showing an increase in May. Is this just a correction or a trend? We will just have to wait for the coming months to tell us that.
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