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Stronger economy bolsters consumer confidence in Florida

By Palm Beach Business.com

DELRAY BEACH — Consumer confidence surged in Florida but fell back nationally in January, according to separate reports released Tuesday

The University of Florida’s consumer confidence index rose 7 points to 77,  as perceptions of the U.S. economy over the next year rose by 14 points, while expectations of the economy over the next five years rose by 10 points.

“Consumer confidence is now back to the level it was in January 2011,” said  UF survey Director Chris McCarty said.  “We are beginning the year with the same pattern as last year where there were relatively steady increases in confidence from the end of the summer with a surge to 77 in January 2011.  This was followed by seven months of declines with the low of 61 in August 2011 when Congress debated the debt ceiling”

Meanwhile, the Conference Board’s consumer confidence index slipped to 61.1 from 64.8 a month ago as consumers perception of their situation dropped sharply .

"Consumer Confidence retreated in January, after large back-to-back gains in the final two months of 2011,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Consumers' assessment of current business and labor market conditions turned more downbeat … .  Consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects. 

“Recent increases in gasoline prices may have consumers feeling a little less confident this month." 

McCarty said which way consumer sentiment goes could depend on events in Europe and not just because of the implications for the banking industry here.

“While many aspects of the economy are better this year, it remains to be seen whether this level of confidence will be sustained,” McCarty said.  “The biggest threat to the U.S. economy, and therefore Florida, is the recession in Europe which would affect Floridians primarily as decreased demand for Florida tourism, decreased demand for houses from foreign investors, and the stock market portfolios of workers and retirees whose investments would include
companies with exposure to much of Europe.

“However, barring a very negative outcome to the turmoil over European debt, this pattern of confidence, if sustained, bodes well for Florida.”