GAINESVILLE, Fla. – Sept. 29, 2010 – The sealing of the BP oil well in the Gulf of Mexico put a stop to the hemorrhaging of Florida’s consumer confidence, which rose two points to 68 in September, its highest level since May according to a new University of Florida survey.
“With the Gulf oil spill largely behind us, consumer confidence has begun to recover to pre-spill levels,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “This is by no means a return to a state of optimism. Overall confidence is four points lower than it was at this time last year.”
Although this month’s consumer confidence is 10 points below the April reading of 78, all five of the index components posted gains. Rising four points were expectations of U.S. economic conditions over the next year, to 62, and expectations of U.S. economic conditions over the next five years, to 73. Rising one point were perceptions of personal finances now compared with a year ago, to 52, and expectations of personal finances a year from now, to 79. Perceptions of whether it is a good time to buy big-ticket items increased two points to 76.
“It seems increasingly less likely that we will fall into another recession,” McCarty said. “However, there are still a number of drags on the economy and we should expect confidence to oscillate between the upper 60s and lower 70s at least through the end of the year.”
Unemployment in Florida edged up again in August to 11.7 percent, up 0.2 percent from July, McCarty said. Despite that increase, it is still below the record 12.5 percent set in March, he said.
In other disappointing news, prices for existing single-family homes declined in August to a median $134,000, McCarty said. While this is still above the price at the beginning of the year, it is close to 2002 levels, he said.
Prices for food and energy have remained in check, although there are signs that gas and some food prices may go up in the coming months, he said.
Also of concern is that the stock market continues to exhibit volatility, but it appears to be resistant to a major downturn, he said.
On the positive side, job growth is expected, McCarty said. Companies have accumulated enormous amounts of cash and are waiting for some indication about where to invest it for growth, he said.
“Unfortunately, the job losses from this past recession have been so high that it will take many years to return to pre-recession levels,” he said. “Many jobs will not come back. Persistently high levels of unemployment will continue to be an anchor on consumer confidence, which we anticipate to remain near its current level over the next several months.”
The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for September was 419 responses.
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