Florida Consumer Confidence Falls Slightly
National consumer confidence levels edged up in January, but Floridians’ feelings about the economy dipped a bit, according to two surveys released Tuesday.
The Conference Board, a private research group, reports that its consumer confidence index edged up to 110.3 in January from a revised 110.0 in December, according to Wednesday’s Palm Beach Post. Analysts expected a reading between 110.0 and 110.5.
The January index was the highest in five years, suggesting that consumers will continue to be the engine behind U.S. economic growth in the upcoming months.
Consumer confidence around the country was boosted by a jobless rate in decline and a market that was chugging along and by declining energy costs.
At the same time, in the Sunshine State, consumer confidence index dipped to 89 in January from 90 in December as uncertainty over the Florida housing market continues.
“The big question is still how the slump in housing will affect consumers and the economy in general,” said survey director Chris McCarty. “In my opinion, the state will continue to experience the effects of Florida housing prices through 2007, and some of the decline in consumer confidence is due to that.”
The national consumer confidence index, which is based on a survey of 5,000 U.S. households, is closely watched because consumer confidence - like Florida mortgage rates - often signals changes in spending trends. In all, consumer spending makes up about two-thirds of U.S. economic activity.
David H. Resler, chief economist with Nomura Securities in New York, noted that January’s reading was boosted by optimism about the jobless rate, with nearly 30 percent saying jobs were plentiful.
“You’re looking at a reflection of what is making consumers feel good,” he said. “It tells you that the conditions that underpin things like consumer spending are pretty good, so people are going to spend.”
The figures also showed people are not quite as pessimistic about the car market as they were, but housing is still languishing.
Weakness in the housing market, and a decline in Florida home mortgage demand, could be seen in another report issued Tuesday.
An index prepared by Standard & Poor’s showed that the prices of single-family homes across the state (and the nation) rose in November at the slowest rate in more than a decade, a further sign that housing will be a drag on the economy.
The S&P/Case-Shiller composite index showed a 1.3 percent year-over-year rise in the price of a single-family home based on existing homes tracked over time in 10 metro areas.
