Consumer confidence among Floridians decreased to a near-record low in August, according to a new University of Florida survey. This month's mark of 62 is only three points higher than the record-low 59 set in June 2008.
"Although none of the index components were at record lows, the combined decrease in confidence across all five components is remarkable," said Chris McCarty, director of the Bureau of Economic and Business Research. "If past history of this index is any indication, we are in, or at least very near, a recession. We are not likely to know for certain until after the fourth quarter."
All five of the index's components decreased, most notably perceptions of U.S. economic conditions over the next year, which fell six points to 51; perceptions of U.S. economic conditions over the next five years, which dropped six points to 63; and confidence to purchase big-ticket items such as cars and appliances, which dipped five points to 70. Perceptions of personal finances now compared with a year ago dropped four points to 54, and expectations of personal finances a year from now fell one point to 74.
A loss in confidence among women and seniors played a major role in the fall. Confidence among women dropped eight points to 59 and confidence among those age 60 and over fell nine points to 57. The loss in confidence among seniors was surprising because confidence among seniors rose five points in July, McCarty said, but the debate in Washington over raising the debt ceiling and other issues may have finally taken their toll.
"This is no doubt influenced by debt reduction talks, which now routinely include modifications to Medicare and Social Security as part of the solution," McCarty said. "As there are no clear details about potential changes, some seniors are becoming unnerved. Their concerns are further fueled by wild swings in the stock market."
Despite the significant drop in confidence, state and national economic indicators were not much different from last month when overall confidence rose two points. State unemployment remained steady at 10.7 percent and national unemployment dropped 0.1 percent to 9.1. Gas prices have declined since the beginning of August, McCarty said, and the median price of a single-family home in Florida declined to $136,500 from $138,000 in June. McCarty said tourism in Florida continues to be a positive, offsetting job loss in construction and government employment.
"Over the next few months, we do not expect consumer confidence to decline much further," McCarty said. "While we are near record lows, as is the rest of the country, the economic circumstances are not anything like they were in 2008. At a certain point, it becomes difficult for the index to go much lower."
The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for August was collected from 412 responses.
The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.