Consumer confidence falls nationally, rises in Florida

By Palm Beach Business.com

DELRAY BEACH — Consumer confidence moved in opposite directions this month, down nationally but up in Florida, according to separate reports released Tuesday.

The Conference Board’s Consumer Confidence Index, which had improved in August, fell to 48.5 September from 53.2 a month earlier. The University of Florida’s statewide consumer confidence index rose 2 points to a reading of 68 in September.

“September’s pull-back in confidence was due to less favorable business and labor market conditions, coupled with a more pessimistic short-term outlook,” said Lynn Franco, director of the Conference Board’s research center. “Overall, consumers’ confidence in the state of the economy remains quite grim. And, with so few expecting conditions to improve in the near term, the pace of economic growth is not likely to pick up in the coming months.”

The picture isn’t much different in Florida, despite this month’s improved reading.

“With the Gulf oil spill largely behind us consumer confidence has begun to recover to pre-spill levels,” said Chris McCarty, who directs the UF survey.  “This is by no means a return to a state of optimism.  Overall confidence is four points lower than it was at this time last year.  There are still a number of drags on the economy and we should expect confidence to oscillate between the upper 60s and lower 70s at least through the end of the year.”

The consumer confidence indices are important for businesses that depend on consumer spending.

Nationally, the percentage of survey respondents saying business conditions are “bad” increased nearly four points to 46.1 percent, while those saying business conditions are “good” declined to 8.1 percent from 8.4 percent.

Consumers’ appraisal of the labor market was also less favorable. Those claiming jobs are “hard to get” rose to 46.1 percent from 45.5 percent, while those stating jobs are “plentiful” decreased to 3.8 percent from 4.0 percent.  

UF’s McCarty said there are a number of things working in favor of the economy, enough to make a second recession unlikely. For one, companies are sitting on piles of cash and ready to begin investing when again when opportunity presents itself.

“This will ultimately result in job growth,” McCarty said.  “Unfortunately the job losses from this past recession have been so high that it will take many years to return to pre-recession levels.  Many jobs will not come back.  Persistently high levels of unemployment will continue to be an anchor on consumer confidence which we anticipate to remain near its current level over the next several months.”