Floridians increasingly are feeling good about where the national economy is headed over the next five years, a new survey shows.
That's a big reason why the state's consumer confidence index rose for the third straight month, hitting a level last seen in August 2007, before the onset of the Great Recession.
The statewide measure of consumer confidence rose 2 points in May to 81, dramatically higher than two years ago when it dipped into the low 60s, according to the University of Florida's monthly survey. That mirrors a rise in consumer confidence in a national report also released Tuesday.
Florida's index is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest possible score is a 2; the highest is 100.
Three of the five components that make up the Florida index increased in the latest telephone poll. Those surveyed were more optimistic that their own personal finances will improve over the next year (up 3 points) and that the national economy is on the upswing this year (up 2 points). They were particularly bullish in trusting the national economy will be better within five years, with that measure jumping 8 points to 85.
That helped offset a drop in respondents who felt better off financially than a year ago (down 3 points). The gauge of whether this is a good time to buy a big-ticket item also dropped by 1 point.
Consumers have been encouraged by a stream of positive news: home prices continue to rise; the stock market has rebounded to new highs; new home construction is picking up; and Florida's unemployment rate has steadily fallen to reach a near five-year low of 7.2 percent.
"As the headlines turn to news other than budget cuts and possible changes to Social Security, consumer confidence improves for Floridians," said survey director Chris McCarty of UF's Bureau of Economic and Business Research. "This is especially true for seniors."
The report was released the same day the Conference Board research firm reported that national consumer confidence jumped to a five-year high.
An improving job market helped fuel the national index's rise to 76.2 in May, its highest reading since February 2008.
"Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining traction it lost due to the fiscal cliff, payroll tax hike and sequester," said Lynn Franco, director of economic indicators for the Conference Board.
However, there is some concern the confidence boost won't last.
McCarty, the UF researcher, said he expects the state index will stay unchanged or pull back slightly this summer as consumers feel the delayed effects of federal budget cuts. "For now, optimism among Floridians is growing," he said.
Home prices continue to climb in March
The United States experienced another round of broad-based home price gains in March, reinforcing the housing recovery's important role in driving economic growth. All 20 cities tracked by the Standard & Poor's Case-Shiller home price index posted year-over-year gains, as they have done for three consecutive months now. The 20-city composite index rose 10.9 percent over the past year. That is the biggest annual increase since April 2006. Several cities — Charlotte, N.C.; Los Angeles; Portland, Ore.; Seattle; and Tampa — had their largest month-over-month gains in more than seven years.