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Florida consumer confidence makes unexpected jump

Start with signs that housing prices are flattening. Stir in news that the free fall in the economy appears to have stopped, at least for now.

And you wind up with a surge in consumer confidence.

Both the national and Florida consumer confidence indexes posted higher-than-expected jumps in April, according to reports out this morning. Economists closely track consumer sentiment because consumer spending accounts for more than two-thirds of economic activity.

Nationally, the New York-based Conference Board said that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. That's the highest level since November.

Meanwhile, a University of Florida survey found that consumer confidence among Floridians surged 6 points to 71 in April, the highest since February 2008.

"The size of the increase comes as somewhat of a surprise," said Chris McCarty, director of UF's Survey Research Center at the Bureau of Economic and Business Research. "We had expected confidence among Florida's consumers to move up and down in a fairly narrow window from the low to the upper 60s."

McCarty acknowledged economic recovery is still shaky; among the looming negatives are continuing job losses. As of March, Florida's unemployment rate had reached 9.7 percent, a 33-year high.

"However, in balance, consumers seem to have absorbed most of the bad news and are at least not seeing things getting much worse," he said. "Perhaps we really have seen the bottom in terms of Florida consumer confidence, which was back in June of last year."

In June, Florida's consumer confidence level had tumbled to 59, its lowest level in the index's 25-year history.

In April, all five components of the state index rose. Leading the way: The perception of whether it is a good time to buy big-ticket items, such as cars and appliances, jumped 15 points to 77. The smallest rise, of two points, was the perception of personal finances now compared to a year ago.

McCarty said the lack of developments on large bailouts or recent notable bankruptcies may have soothed consumers.

However, the possible bankruptcies of General Motors and Chrysler along with budget cuts in Florida could cause another confidence drop ahead, he said.

The cutoff date on the national consumer confidence survey was April 21, before concerns about a possible swine flu pandemic were widespread.

Florida's index, based on a monthly telephone survey, is benchmarked to 1966. That means a value of 100 represents the same level of confidence for that year.

Times wires contributed to this report. Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242.

The numbers

39.2 Nationally, the Conference Board said that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. That's the highest level since November.

71 A University of Florida survey found that consumer confidence among Floridians surged six points to 71 in April, the highest since February 2008.

Florida consumer confidence makes unexpected jump 04/28/09 [Last modified: Tuesday, April 28, 2009 8:08pm]
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