UF Economists: Florida Consumer Confidence Continues Dip From Record

April 28, 1999

GAINESVILLE — Consumer confidence in Florida dropped four points in April, reflecting less faith in both national economic conditions and personal financial health, University of Florida economists report.

The preliminary index for April dipped to 103, five points lower than February’s 15-year record high, said Chris McCarty, survey director with UF’s Bureau of Economic and Business Research.

“Consumer confidence is still high, but if the decline continues for a few months there may be indications that the economy is running out of fuel,” McCarty said. “While interest rates are still low and unemployment and inflation are virtually nonexistent, personal saving is down dramatically. Many economists believe that the extended period of growth has been supported by active consumer spending, which is coming out of personal savings. The question is how long can this go on.”

The survey component measuring consumers’ perceptions of national economic conditions over the next year was down 12 points in April, and the one measuring personal financial health was down five points.

Female respondents and those making less than $30,000 a year accounted for most of this month’s decline, said UF economist Dave Denslow.

Confidence among women dipped severely for the component measuring expected national conditions over the next year, falling 21 points from 115 in March to 94 in April, Denslow said. The same component fell by 19 points for those making less than $30,000 a year, he said.

Optimism about whether it is a good time to buy big-ticket consumer items that often are bought on credit was virtually unchanged. That is consistent with retail sales, up 8.7 percent from March 1998, though only slightly than in February, McCarty said.

The bureau conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for April was calculated from 499 responses. Numbers for prior months are based on about 1,000 residents. The margin of error for the index is 4 percent.

Consumer confidence is designed to help predict buying patterns by measuring consumers’ mood toward buying. Although other economic indicators also are predictors of buying patterns, consumer confidence tends to be available sooner than those indicators.