UF Survey: Slump In Retail Sales Signals Drop In Economic Confidence

September 27, 2000

GAINESVILLE, Fla. — A sharp dip in retail sales and falling optimism about the U.S. economy pushed the Florida Consumer Confidence Index into a three-point slide in September, University of Florida economists said Tuesday.

The preliminary index for September fell to 109 from its all-time high of 112 in August, said Chris McCarty, survey director with UF’s Bureau of Economic and Business Research.

“Nationally, there are some signs that the economy is slowing,” McCarty said. “Until recently consumers were not reacting to other signs of a slowing economy. But August retail sales were down significantly from July and more in line with expectations from economists.

“Floridians remain extremely optimistic and are probably still willing to contribute their share to consumer spending,” he said. “But this optimism should decline through the fall.”

“The main message of the September index is that Floridians remain very confident,” added UF economist Dave Denslow. “Spending will continue to be strong over the next few months, though held back slightly by higher gasoline prices and rising utility bills.”

The survey measured lower optimism in three of its five components. Consumers’ perceptions of their personal financial situation dropped six points. And optimism about economic conditions in the United States fell for both the short- and long-term components, the latter falling by eight points.

“Last month was strange for consumer confidence in Florida,” McCarty said. “We registered an all-time high with our index while both the Conference Board and the University of Michigan registered modest declines. This month we are down, but only one point off the previous record, and the Conference Board reports a one-point gain.”

The bureau conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for September was calculated from 406 responses. Numbers for prior months are based on about 1,000 responses. The margin of error for the index is 3 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.