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Consumer confidence holds steady in Florida

By Palm Beach Business.com

DELRAY BEACH — Consumer confidence held steady over the past month in the Sunshine State; nationally, consumers were a tad more shaky,  according to separate reports released Tuesday.

The University of Florida’s statewide consumer confidence index for August held at 77, same as July. The Conference Board’s national index fell to 60.6 from July’s 65.4. That’s lowest reading for the index since November.

 “Floridians seem somewhat resilient in the face of the economic challenges facing the U.S. and Florida this coming January,” UF Survey Director Chris McCarty said.  “Despite the looming financial woes surrounding the ‘fiscal cliff’, Floridians are reasonably optimistic.  Both the overall index and several of the components are near post-recession highs. “

The fiscal cliff is a reference to cuts in the federal budget and the expiration of Bush-era tax cuts that will happen if Congress is unable to reach a deal to cut the deficit.

Said the Conference Board’s Lynn Franco: "The Consumer Confidence Index is now at its lowest level since late last year. A more pessimistic outlook was the primary reason for this month's decline in confidence. Consumers were more apprehensive about business and employment prospects, but more optimistic about their financial prospects despite rising inflation expectations.

“Consumers' assessment of current conditions was virtually unchanged, suggesting no significant pickup or deterioration in the pace of growth."

The August reading is only a point below the post recession high of 78 but still far below what was considered normal before the recession.

McCarty said the economy is in fact showing signs of improvement. The housing market is making gains, as is the stock market. The unemployment rate for July ticked higher but the job market is showing broad gains generally. But he doesn’t expect that to translate to higher confidence readings before November’s election.

“Our expectation is that consumer confidence will go a bit lower as the election approaches,” McCarty said.  “A critical point will be the presidential debates beginning in October.  The financial problems coming in January will almost certainly be among the questions, and this may be the first opportunity for Floridians to hear how those problems may be addressed.”