Phil Ammann
Consumer confidence in Florida has dropped slightly in September, down 3 points.
The monthly University of Florida consumer sentiment survey ticked downwards to 87.9, with four of five components that make up the index declining and one increasing.
Compared with the same time last year, perceptions of personal finances fell 2.1 points to 80.5; expectations of personal finances for the next 12 months now fell 3.5 points to 96.9.
Overall, assurance in U.S. economic conditions over the next year also fell 5.9 points to 83, and confidence for the next five years fell 6.1 points to 82.3.
However, the survey found Floridians are gradually feeling that now is a good time to buy big-ticket items like a car, rising 3.5 points to 96.7.
“Given the correction in the stock market at the end of August, we expected our index to decline this month,” said Chris McCarty, director of the UF Survey Research Center in the Bureau of Economic and Business Research.
In a prepared statement, McCarty suggests that the market may be reacting to recent weakness in the Chinese economy, a key driver of global economic growth.
Lower global demand and uncertainty over economic and political stability in China were also factors in decreased economic confidence in the U.S.
McCarty pointed out that the recent stock market shake-up reflects the demographics of consumer sentiment, with sharpest declines in both long- and short-term confidence was among older respondents and those making more than $50,000 per year.
“Both groups are likely concerned that further market corrections are coming,” McCarty said. “While U.S. stock markets have stabilized in the short run, we are down 5.4 percent for the year and at one point were down more than 10 percent.”
There were bright spots in the Florida economic picture, though. Unemployment rates declined once again in August, dropping to 5.3 percent, only two-tenths of a point higher than the U.S. rate (5.1 percent).
Job gains, unlike recent months, were in private education and health services. There was also a small dip in the labor force, contributing to lower unemployment. Labor force participation rate declined again to 58.4 percent, a sharper drop compared with the national rate throughout 2015 and now a full 4.2 percentage points lower than the U.S. rate.
“This is a trend that must change for Florida’s economy to improve,” McCarty noted.
Housing prices flattened in August, despite being up more than 11 percent from a year ago. Mortgage rates have declined since June; rates for a 30-year fixed mortgage are at 3.79 percent.
McCarty added that the numbers indicate a good time to buy a home for those who can qualify and afford the down payment.
Falling energy prices contributed to weaker retail sales, with gasoline prices expected to drop below $2 a gallon for regular unleaded in many parts of Florida by the end of the year.
“There was a lot of anticipation leading up to the Federal Reserve meeting in September, with about half of economists expecting a small rate increase and half expecting rates to stay the same,” McCarty said. “While the Fed decided to leave rates alone, they have signaled that there will be a modest increase either in October or December. Another factor that may affect confidence in October is the possible government shutdown over funding for Planned Parenthood.”
Conducted Sept. 1 to 20, the UF study used responses from 426 individuals on cellphones, representing a demographic cross-section of Florida.
UF researchers benchmark the consumer confidence index to 1966 with a value of 100 representing the same level of confidence for that year. The lowest index possible is 2, the highest is 150.
Details of the September 2015 survey can be found at bebr.ufl.edu/csi-data.
