After a two-month upswing, consumer confidence among Floridians fell across the board in February "as hopes for a quick fix to the nation's economic crisis faded," according to a University of Florida report released Tuesday.
Economist Chris McCarty with UF's Bureau of Economic and Business Research, said waning optimism reflects that "the novelty of a new administration" has worn off, "met with the sustained reality of a faltering economy."
"Consumers are reporting severe financial strain and are bracing for the long recession that most economists have predicted," he said.
UF's report mirrored national numbers also out Tuesday. The New York-based Conference Board said its Consumer Confidence Index plummeted more than 12 points in February to 25. That set a new low and was well below the 35.5 level expected by economists surveyed by Thomson Reuters.
"Increasing concerns about business conditions, employment and earnings have further sapped confidence and driven expectations to their lowest level ever," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
The 3-point drop in Florida's consumer confidence pushed the index to 63, four points above its all-time low of 59.
All five of the components that make up Florida's index dropped: Expectations of U.S. economic conditions over the next five years fell 6 points to 69; expectations of economic conditions over the next year fell 4 points to 51; expectations of personal finances a year from now fell 3 points to 80; perceptions of personal finances now compared to a year ago fell 1 point to 42; and perceptions of whether it is a good time to buy big-ticket items fell 1 point to 73.
A monthly telephone survey, UF's consumer confidence index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.
McCarty said a temporary upswing in the index in December and January was related to optimism about the incoming Obama administration and federal intervention into the economy.
Unlike previous government efforts to jump-start the economy, the recently passed stimulus package offers much to everyday consumers, McCarty said, between tax cuts, extended unemployment benefits, and health insurance and relief for troubled homeowners.
Still, consumers are waiting for signs that the overall economy is improving, and those signs aren't forthcoming.
"Unfortunately, as time moves on, the problems with the economy will become less associated with housing and evolve into something more difficult to resolve," McCarty said. "There is no doubt that we will be working through this recession through this year and into 2010."
McCarty predicted that consumer confidence among Floridians will remain below 70 through 2009.