Florida's consumer confidence shows post-election decline, study finds

Nov 28, 2012

Florida's consumer confidence declined in November to 76, down four points from the revised October reading of 80, according to a new University of Florida study. However, while consumer confidence is historically low, it is still relatively high post-recession, said Chris McCarty, director of UF's Survey Research Center in the Bureau of Economic and Business Research.

The decline was not a surprise.

"We expected it for two reasons," McCarty said. "The main reason was the outcome of the elections. Florida was the most divided state in the country, with President Obama winning by 73,309 votes. No matter who won, half of the state was not going to be happy with the outcome."

In fact, confidence among Democrats in Florida rose from 99 in October to 103 in November, while confidence among Republicans fell from 62 in October to 50 in November, according to McCarty's analysis.

The survey also reflects worry about the "fiscal cliff" if scheduled tax increases and cuts happen early next year. of the potential effects if this occurs has risen because has increased since the presidential campaigns ended, McCarty said.

He said Floridians should watch how Congress handles the Alternative Minimum Tax, or AMT, which was created to ensure that high-income individuals, corporations, trusts and estates pay a minimum amount of tax regardless of deductions, credits or exemptions.

"Without a fix, the AMT for 2012 will expand greatly from about 4 million to over 30 million Americans. While most of the effects from the fiscal cliff will occur over the year, the AMT would be calculated on this year's tax bill, potentially slowing refunds and increasing taxes for many middle-class households."

If that happens, many will be unprepared for the immediate in April, McCarty warned. "Those who rely on refunds to pay for holiday spending should consider that without , their refund could be delayed as the IRS makes adjustments."

Such economic concerns may explain why four of the five components used in the survey declined. Respondents' overall view that they are better off financially than a year ago fell five points to 59, while their expectations their personal finances will rise by this time next year also fell five points to 80.

In addition, their confidence in U.S. economic conditions over the next year dropped three points to 82, while their trust in the national economy over the next five years fell six points to 80.

Only one component showed no decline. Respondents' expectation that now is a good time to buy an expensive consumer item such as a refrigerator was unchanged at 79.

Despite the pessimistic mood suggested by the study, other economic indicators offer reasons for optimism. For example, Florida's unemployment rate declined again in October to 8.2 percent, the lowest since the depth of the recession in 2008, with an increase in new jobs primarily in health care, tourism and real estate sectors.

Demand for Florida homes is picking up with the median price for an existing single-family home at $145,000, up 9 percent over last year. "With interest rates at a record low, the demand for housing is likely to continue well into 2013," McCarty said.

Gas prices have declined steadily since Labor Day and may stay relatively low for several years if fracking of shale oil in the Midwest develops into a reliable source of energy, McCarty said. In addition, the stock market is still holding onto the gains made this year.

Meanwhile, "the holiday season got off to an earlier start this year, but early sales figures were mixed," McCarty said. "Thanksgiving sales were relatively strong, but clearly robbed Black Friday sales.

McCarty expects holiday sales growth to be positive, yet modest, with an increase of 2 percent as predicted by the Ball State Center for Economic and Business Research.

Conducted Nov. 12-21, the UF study reflects the responses of 420 individuals who represent a demographic cross-section of Florida.

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.

Explore further: Not just the poor live hand-to-mouth

More information: www.bebr.ufl.edu/cci

add to favorites email to friend print save as pdf

Related Stories

UF survey: Florida consumer confidence jumps in December

Dec 28, 2011

(PhysOrg.com) -- Consumer confidence among Floridians rose three points to 69 in December, reflecting a cautious optimism in the economy, according to a recent University of Florida survey. Though the latest figure is only ...

UF: Florida consumers remain mildly optimistic

Feb 29, 2012

Consumer confidence among Floridians dropped one point in February to 76 from January, according to a University of Florida survey. The modest decline followed two months of rising levels of confidence in the economy.

Recommended for you

Not just the poor live hand-to-mouth

10 hours ago

When the economy hits the skids, government stimulus checks to the poor sometimes follow. Stimulus programs—such as those in 2001, 2008 and 2009—are designed to boost the economy quickly by getting cash ...

Which foods may cost you more due to Calif. drought

Apr 17, 2014

With California experiencing one of its worst droughts on record, grocery shoppers across the country can expect to see a short supply of certain fruits and vegetables in stores, and to pay higher prices ...

User comments : 0

More news stories

Male-biased tweeting

Today women take an active part in public life. Without a doubt, they also converse with other women. In fact, they even talk to each other about other things besides men. As banal as it sounds, this is far ...

Not just the poor live hand-to-mouth

When the economy hits the skids, government stimulus checks to the poor sometimes follow. Stimulus programs—such as those in 2001, 2008 and 2009—are designed to boost the economy quickly by getting cash ...

Archaeologists, tribe clash over Native remains

Archaeologists and Native Americans are clashing over Indian remains and artifacts that were excavated during a construction project in the San Francisco Bay Area, but then reburied at an undisclosed location.