Florida consumers unexpectedly more confident in January

By Palm Beach Business.com

DELRAY BEACH — Perhaps it was the stream of positive news on the economy. Perhaps it was the steadily rising stock market. But something has put consumers in a better mood.

Both the Conference Board and the University of Florida reported a surge in consumer confidence in January nationally and in the Sunshine State. The Conference Board’s index rose 7.3 points to 60.6 points, its highest point since May, while the UF index rose 7 points to 77, the highest reading since April.

“Consumers have begun the year in better spirits,” Lynn Franco, director of the Conference Board’s Consumer Research Center. As a result, the Index is now near levels not seen since last spring. Consumers rated business and labor market conditions more favorably and expressed greater confidence that the economy will continue to expand and generate more jobs in the months ahead. Income expectations are also more positive. Although pessimists still outnumber optimists, the gap has narrowed.”

Said Chris McCarty, director of the UF survey: “The size of this increase in confidence among Floridians was not expected,” “Confidence among Floridians had been mired in the low 70s for the past few months, consistent with other economic indicators that characterize the Florida economy. It is worth noting that the biggest increases were in perceptions of economic conditions in the short and long term. Much of this likely has to do with sustained gains in the stock market over the past two months.”

McCarty, however, doesn’t expect the good mood to persist, at least not in Florida. He also said it will interesting to see the University of Michigan’s national survey due out Friday. Both the Michigan and Florida surveys are structured similarly.

“Looking forward we expect consumer confidence to fall back to the low 70s, particularly as both the federal and state government announce many of the inevitable spending cuts to balance budgets,” McCarty said. Many of those cuts will affect Florida consumers directly, and will potentially affect the stock market, which is the most positive indicator this month.”