Concerns about rising unemployment have popped any balloons of optimism that the recession is nearing an end.
Both the national and Florida consumer confidence levels fell to lower-than-expected levels in July, according to reports released Tuesday. Both indices dropped in recent months after being temporarily buoyed in the spring.
The national Consumer Confidence index fell from 49.3 to 46.6. Economists surveyed by Thomson Reuters had expected the reading to stay at 49. It would take a big surge, a reading above 90, to indicate the economy is on solid footing.
The University of Florida's consumer confidence index, meanwhile, dropped two points to 67. Chris McCarty, director of UF's Survey Research Center at the Bureau of Economic and Business Research said the decline came "as a bit of a surprise." He expected confidence levels in the upper 60s to low 70s for several months.
After all, McCarty pointed out, the housing market appears to be stabilizing with sales on the rise again and the stock market has rebounded strongly, with the Dow back above 9,000.
The culprit ruining the party, he said, is Florida's double-digit unemployment. The jobless rate is officially at 10.6 percent statewide and 11.1 percent in the Tampa Bay area. But many economists think those numbers underestimate the depth of the problem, with a large number of Floridians who have given up looking for work, at least temporarily, and others seeking full-time work but settling for part-time jobs.
Although some economists believe the recession is nearing an end, employers are typically slow to start rehiring until a recovery is well under way.
Four of the five components of Florida's confidence index fell in July. The largest drop was in expectations of how the U.S. economy will be faring over the next five years, which fell nine points to 72. The only measurement in the index to rise was whether consumers feel it's a good time to buy big-ticket items. That jumped seven points to 75.
The state index, based on a monthly telephone survey, is benchmarked to 1966, so a value of 100 represents the level of confidence for that year.
Times wires contributed to this report.