Consumer Confidence Sinks in Florida

Rising energy prices, a declining Florida housing market and a sudden dip in the stock market contributed to a six-point drop in March in Florida’s consumer confidence in March, its lowest level in six months, University of Florida economists reported.

The decline follows several slight gains in the last few months and has happened in spite of continued low Florida mortgage rates and relatively stable inflation.

The big question now remains how the housing market will affect the overall economy.

“It is now clear that the decline in real estate was worse than many had imagined, although there have been those who predicted this decline,” said Chris McCarty, director of the Survey Research Center at the university’s Bureau of Economic and Business Research in Gainesville.

The drop in consumer confidence was broad-based, with declines in all five components used to gauge the state’s level. For March the index was at 86, with 100 representing the same level of confidence for the year.

The largest drop was in the index measuring whether it is a good time to buy big-ticket items, which fell 11 points, to 98.

Expectations of U.S. economic conditions over the next calendar year fell by six points, to 79, while expectations of U.S. economic conditions over the next five years fell five points to 82.

Lately, bad credit Florida mortgage and national subprime lending problems have shaken financial markets and created a general climate of widespread panic in the industry. The consumer confidence fall is the first evidence yet of a spill over into the public mindset.

Like home builder confidence, consumer confidence is often considered an accurate gauge of future home prices and housing activity.

SOURCE: TCPalm.com