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As the news got worse this month, Floridians grew fearful about their own finances and the future of the economy.
As a result, the March drop in consumer confidence as measured in a monthly survey is the worst on record — worse even than the shock delivered by Hurricane Katrina in 2005.
“The decline in consumer confidence was fueled by growing pessimism" in every aspect of consumer confidence "due to the economic damage brought by the coronavirus outbreak,” said Hector Sandoval, director of the economic analysis program at the University of Florida’s Bureau of Economic and Business Research.
From March 1-26, university researchers called 337 Florida residents on their cell phones to ask:
• How they feel about their own finances now compared with a year ago.
• What they expect their finances to be like a year from now.
• Whether they think this is a good time to make a major household purchase like an appliance.
• What they expect the national economy to be like in a year and five years.
But the coronavirus pandemic is different.
In a matter of days, the job market went from record low unemployment to hundreds of thousands thrown out of work in industries at the center of Florida’s economy: tourism, hospitality, restaurants and retail. In a week, more than 74,000 Floridians applied for unemployment benefits — more than 11 times as many as the week before — and many more said they were unable to do do because the Florida Department of Economic Opportunity’s computers kept crashing.
“As consumers stay home and businesses shut down in an effort to contain the spread of the virus, consumer spending has quickly slowed, and massive layoffs have occurred across the state and country," Sandoval said Tuesday in an announcement of the survey. "As a result, we observe the largest declines in confidence coming from consumers’ opinions as to whether now is a good time to buy a big-ticket item and their expectations about the national economy in the short-run.”
Each month since 1985, researchers use the poll results to create an index of consumer confidence across the state. On the index, 2 is the lowest, bleakest score, and 150 is the highest and most optimistic.
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In February, the index was at 102.3, higher than almost any time in 20 years.
In March, it dropped to 88.8.
That’s similar to but even bigger than the sudden drop in consumer confidence measured by a national survey done by the University of Michigan.
With economists inside and outside Florida saying the response to the pandemic has dropped the economy into a recession, Sandoval said researchers don’t expect consumer sentiment to improve until after efforts to curtail the spread of the virus have some success.
“Looking ahead, we expect consumer confidence to decline as long as the measures to contain the outbreak remain in place," Sandoval said. "For Florida, a state with a large portion of economic activity in industries severely affected by these measures, the downturn will potentially be more severe.”
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