Thursday, May 24, 2018
Business

Florida consumer confidence falls for fourth straight month

Florida's consumer confidence fell in September for the fourth month in a row, raising concerns of a broader economic slump, according to a University of Florida survey released Tuesday.

The one-point decline pushed the state's confidence index down to 76, still much better than during the depths of the recession but showing heightened consumer concern.

"The decline is definitely a trend and one that is now being reflected in other economic data," said Chris McCarty, director of UF's Survey Research Center in the Bureau of Economic and Business Research.

McCarty said the continued drop suggests that Floridians could face another recession if the federal government shuts down over yet another battle over the national debt.

Three of the five components measured in the monthly telephone survey fell. The biggest drop: faith that the economy will be better five years from now was down six points. Respondents also were less confident that both their personal finances and the U.S. economy would be in better shape a year from now.

Lower-income households were particularly pessimistic about their current and future personal finances, McCarty said.

Nationally, consumer confidence also fell slightly this past month, according to a report Tuesday from the New York-based Conference Board.

The private research group said dwindling optimism over hiring and pay increases led to the drop in the confidence index to 79.7 in September. That's down from August's reading of 81.8.

The optimism of consumers is closely watched on both the national and state level because consumer spending accounts for nearly three-fourths of all economic activity.

"It is worth noting that our July reading was among the first economic indicators to show what now appears to be a slowdown in both Florida and U.S. economic indicators," McCarty said.

Although Florida's unemployment rate fell to 7 percent last month, the improvement masks deeper problems within Florida's labor force. A big reason for the continued improvement is more people have stopped looking for work and are therefore no longer counted within the labor market. If discouraged job seekers return, it could drive unemployment back up.

Florida actually lost more than 4,000 jobs between July and August.

McCarty said economic conditions could worsen if political leaders in Washington can't resolve another battle over the national debt ceiling and a potential federal government shutdown ensues in the next couple of weeks.

"A shutdown of even a short duration would likely be enough to trigger another recession," he said. "Many economists have suggested we are due for another one given historical patterns."

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