Consumer confidence among Floridians tumbled in March as international turmoil and rising gas prices stoked concerns about the economy's direction, according to a survey released Tuesday.
The decline reported by the University of Florida, which mirrors a sharp drop in consumer confidence nationally, took away much of the gains from earlier this year. A couple of months ago, optimism was on the rise with hiring picking up nationally, new filings of unemployment claims falling and higher paychecks thanks to a tax compromise between Republicans in Congress and the Obama administration.
More recently, however, events overseas have upstaged any positive economic news on the home front. That knocked Florida's index down four points to a reading of 72.
"There's been a lot of news in March for consumers to process," said Chris McCarty, survey director within UF's Bureau of Economic and Business Research. Specifically, he cited unrest in the Middle East and North Africa as well as the earthquake and tsunami in Japan.
"The unrest in the Middle East and North Africa has been both inspirational and unnerving," McCarty said, noting that the deterioration in Libya is raising concern over U.S. involvement as well as the impact on oil production. The Japanese crisis, meanwhile, is sparking worries about nuclear safety and the international product supply line.
As a result, surveyed Floridians were much more wary about the country's direction. A survey component that measures perceptions of U.S. economic conditions over the next year fell nine points to 68, the biggest decline in that category since May, 2010. Perceptions of where the U.S. economy would be five years from now dropped six points to 74, the lowest reading since August, 2010. Confidence in buying big-ticket items like cars and appliances fell nine points to 79.
The only component in the index to rise was perception of one's personal financial situation now compared with a year ago, up one point to a still-low 57. Floridians' perception of where their personal finances would be a year from now was unchanged at 81.
Looking ahead, McCarty predicted the aftermath of political uprisings and the Japan earthquake should weigh less on consumers, but the combination of rising gas prices, budget cuts and persistent double-digit unemployment should negate any climb in confidence.
He said it's "likely that the negatives will keep consumer confidence in the upper 60s to lower 70s for the next few months."
Nationally, consumer confidence is also waning, falling more than expected in March to 63.4 from a revised 72 in February, the Conference Board reported Tuesday.
The decline, which reversed five straight months of improvement, was blamed in part on higher gas and food prices.
"Consumers' inflation expectations rose significantly in March and their income expectations soured, a combination that will likely impact spending decisions," Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement.
In a healthy economy, the index level should be closer to 90, a level not seen since the recession began in December, 2007.
In a separate report last week, the University of Michigan's gauge of consumer sentiment plummeted by 10 points in March, reversing five months of gains.