Heading into the elections – and the gradual ramp-up of the holiday spending season – consumer confidence among Floridians took a dip.
Consumer sentiment fell 1.5 points in October to a reading of 90, according to the monthly University of Florida survey released Friday.
The reading, the last one before the Nov. 8 presidential election, is 1.5 points lower than the current year’s average, said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
9.9 pointsOptimism about whether now is a good time to buy a big-ticket item like a car, boat or major appliance took a nose-dive in Florida, from 102.1 to 92.2.
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Among the five components that make up the index, three decreased and two increased.
The main force behind the overall drop: optimism about whether now is a good time to buy a big-ticket item like a car, boat or major appliance nose-dived by 9.9 points, from 102.1 to 92.2.
Floridians’ expectations of how their personal finances would be a year from now also dropped 3.2 points, while expectations of U.S. economic conditions over the next year was nearly flat, dropping less than a point.
On the upside: consumers were more upbeat about their current personal finances compared to a year ago (up 3.5 points) and likewise were more optimistic that national economic conditions would improve during the next five years (up 3.1 points).
UF researchers noted that Florida’s economy has continued to improve based on job creation and a recent increase in the labor force. Florida’s unemployment rate has been unchanged at 4.7 percent since May, while the U.S. unemployment has risen slightly during that same time, from 4.7 percent to 5 percent.
For the first time in two years, the most recent (national) survey found that half of all consumers anticipated that an economic downturn would occur sometime in the next five years.
University of Michigan economist Richard Curtin
Nationally, the University of Michigan Surveys of Consumers also reported a drop in consumer sentiment in October. According to the report, consumers became slightly less optimistic about the prospects for the economy but were still upbeat about their personal finances.
Michigan economist Richard Curtin said there appears to be a recognition that lows in inflation, unemployment and interest rates cannot last forever, even if many consumers couldn’t pinpoint what might trigger a recession.
“For the first time in two years, the most recent survey found that half of all consumers anticipated that an economic downturn would occur sometime in the next five years,” Curtin said.
Typically during the political uncertainty accompanying a presidential election year, some businesses and consumers are reluctant to make major spending decisions. Economists watch consumer confidence gauges closely since consumer spending is a primary driver of economic growth.
“The outcome of the presidential elections will clear up much uncertainty, but a new economic perspective will arise for the nation.” Sandoval said. “November’s consumer sentiment reading will be very important to gauge Floridian’s perceptions and expectations about future consumption, as the holiday sales season begins.”
The UF survey is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The index ranges from a low of 2 to a high of 150.