Florida Consumer Confidence Levels Off In April, Say UF Economists
April 30, 1996
GAINESVILLE –Rising gasoline prices and long-term interest rates may cause consumer confidence in Florida to dip slightly in May after leveling off in April, University of Florida economists reported today (4\30).
The preliminary Florida Consumer Confidence Index held steady in April at 91, the same for March, after climbing steadily from a low of 87 in December, said Chris McCarty, survey director of UF’s Bureau of Economic and Business Research, which conducts the monthly consumer survey.
“We may have reached a point where confidence will level off,” McCarty said. “With mixed messages coming from other economic indicators and no sign of a cut in interest rates from the Federal Reserve, there is nothing to fuel an expansion in consumers’ willingness to increase purchases. Our expectation is that consumer confidence will stay level or decrease slightly in May because of rising gasoline prices and the rise in long-term interest rates.”
Although the April index is one point higher than at the same time a year ago, last April’s figure was part of a downward trend that began earlier in 1995.
The survey components measuring respondents’ personal financial situation and whether they feel the time is good to buy big-ticket items remained relatively unchanged from last month. And the component measuring their expected personal financial situation in a year actually rose three points.
By contrast, the two components measuring respondents’ attitudes about the national economy fell by two points.
“The budget standoff and its unexpected passage in April had little effect on most consumers,” McCarty said. “However, there were signs, though statistically weak due to small sample sizes, that Republican voters may have been unhappy with the budget deal and the possible minimum wage hike. This contributed to the decline in the survey components measuring perceptions of U.S. business conditions.”
Among the 293 Republicans surveyed, the component measuring current business conditions in the nation fell by 16 points between the first and second half of the month, compared to a 3-point decline among the 292 Democratic respondents surveyed. Perceptions about business conditions in the U.S. over the next five years fell by 4 points for the Republicans, but rose by 10 points for the Democrats.
Little change was reported in regional results. Consumer confidence fell two points to 89 in Southeast Florida and rose one point to 93 in the Tampa area in April. The index in the Orlando area remained the same at 96.
In another part of the survey, consumers who are employed were asked if business activity at their place of work is higher, lower or the same as a year ago. The percent reporting higher activity has risen steadily from 44 percent in January to 53 percent in April. But the percentage reporting that more employees will be hired where they work has remained even at 30 percent since January.
“Businesses in Florida are doing well, but most do not plan to create new jobs,” said UF economist Dave Denslow.
The consumer attitude survey is conducted monthly. Respondents are 18 or older and contacted through random telephone dialing. The preliminary index for April was calculated from 884 responses. Numbers for prior months are based on 1,000 responses. The margin of error for the index is almost three points. Regional results are subject to a sampling error of almost four points.
The index is patterned after the University of Michigan’s confidence index for the United States. Both indexes use 1966 as the base year. Numbers below 100 indicate that consumers are less confident than they were in 1966, when the index was 100.