Florida's consumer confidence index unexpectedly zoomed seven points to a nine-month high in January, according to a University of Florida survey released Tuesday.
Chris McCarty, director of UF's Survey Research Center in the Bureau of Economic and Business Research, had expected confidence levels to remain flat, given Florida's 12 percent unemployment rate and struggling housing market. The jump in the monthly telephone survey was particularly surprising, he said, considering the University of Michigan's preliminary reading for U.S. consumer sentiment fell in January to 72.7.
The report did mesh, however, with a separate report from the Conference Board on national consumer confidence that was also out Tuesday. That showed consumer confidence rising 7.3 points in January to 60.6, the highest level since May.
Mark Vitner, senior economist with Wachovia Securities, called it the best report for consumer confidence since the onset of the financial crisis.
The tax compromise brokered between President Obama and the new Republican Congress, declining unemployment claims and increased hiring plans all likely played a role in boosting confidence, Vitner said in a report.
McCarty speculated that the rise in Florida may have been tied to sustained gains in the stock market the past two months and media coverage focused on an improving economy.
All five components of the Florida index showed improvement, driving confidence to an overall mark of 77, the highest since a reading of 78 last April.
The largest gain came in perceptions of how U.S. economic conditions would be a year from now, which climbed 12 points to 78. Among other parts of the index:
• Confidence in purchasing big-ticket items such as cars and appliances rose eight points to 84.
• Perceptions of U.S. economic conditions over the next five years rose six points to 84.
• Perceptions of personal finances now compared to a year ago rose four points to 55.
• Perceptions of personal finances a year from now rose two points to 83.
Looking ahead, McCarty forecast consumer confidence would likely fall back to the low 70s. One looming concern he singled out was that both state and federal government will need to make "inevitable spending cuts" to balance budgets.
"Many of those cuts will affect Florida consumers directly and will potentially affect the stock market, which is the most positive indicator this month," he said.
The index is benchmarked to 1966, meaning a reading of 100 would reflect the same level of consumer confidence as that year.