GAINESVILLE, Fla. – Feb. 26, 2014 – Floridians’ confidence in the economy held steady in February at 78, unchanged from the previous month, according to the latest University of Florida (UF) survey.
Respondents’ overall view that their personal finances are better today than a year ago fell five points to 61, and their expectations of being better off economically a year from now also sank five points to 75.
“We did not expect such a steep decline in perceptions of personal finances both now and in the future,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “It was particularly sharp among seniors, although both young and old respondents were pessimistic about their future finances.” McCarty says it’s “not clear where this growing pessimism is coming from.”
While their personal financial view dimmed a bit, Floridians’ confidence in the U.S. economy over the next year rose one point to 77, while their faith in it over the next five years remained unchanged at 81.
And even with lowered personal financial expectations, more Floridians think it’s a good time to buy a big-ticket item, such as a car. That component rose eight points to 94, the highest number since April 2007 just before the Great Recession began.
Along with the absence of political drama, a mixture of good and troubling economic news could help explain Florida’s unchanging confidence level. The state’s unemployment rate for Florida in December was 6.2 percent, down two-tenths of a percent from November and lower than the national 6.6 percent level. (February figures aren’t yet available.)
“While the unemployment rate was little changed, the number of jobs created was lower than expectations,” McCarty says, “perhaps leading to pessimism about job availability in the coming months.”
Meanwhile, the median housing price for an existing single-family home fell more than $10,000 in January to $162,500.
However, inflation and gas prices remained low. And although the overall stock market value fell by more than 7 percent in January, it regained much of that loss in February.
“We expect consumer confidence to remain near the current level for the next month or so as the economic picture remains somewhat predictable,” McCarty says. “There will be no budget debates, and the Fed will continue to pull back on its purchases of treasuries and securities. It will not likely raise the federal funds rate until next year.”
McCarty expects media attention on mid-term elections and the Florida governor’s race will likely have a greater effect on consumers’ views than national news, assuming there are no surprises.
The study reflects the responses of 399 individuals, representing a demographic cross-section of Florida, who were surveyed by phone Feb. 1-20. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
© 2014 Florida Realtors®