Floridians’ confidence jumped unexpectedly by seven points to 77 in January from the revised December index score of 70, according to a new survey by the University of Florida (UF).
The increase is the largest since the index rose seven points from March to April 2010, and the score of 77 is the highest since the April 2010 mark of 78.
“The size of this increase in confidence among Floridians was not expected,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “Confidence among Floridians had been mired in the low 70s for the past few months, consistent with other economic indicators that characterize the Florida economy.”
The five components that make up the index registered gains with the largest increase coming in the perceptions of U.S. economic conditions over the next year category, which climbed 12 points to 78.
The surge in confidence is even more surprising given that the U.S. consumer sentiment declined in January to 72.7, the 12 percent jobless rate in Florida and the continued decline in value of the Florida housing market
But McCarty speculated the unexpected rise resulted from sustained gains in the stock market the past two months and recent media coverage that has focused on an improving economy.
Despite the increase in confidence, high unemployment levels and declining housing prices remain troublesome. The median price of a single-family home in Florida dropped to $133,000. While housing declines have been less dramatic over the past year and prices aren’t expected to plummet, McCarthy did not rule out further declines.
Inflation is expected to become a factor over the next year, what with rising gasoline prices and basic food.
While the rise in consumer confidence was unanticipated, caution is urged as the index could return to previous marks. This is so because inevitable spending cuts to balance budgets will directly affect Florida consumers, McCarthy said.
Other findings of the survey are:
- confidence in purchasing big-ticket items such as cars and appliances rose eight points to 84
- perceptions of U.S. economic conditions over the next five years also reached 84, a six-point increase.
- perceptions of personal finances now, compared with a year ago rose four points to 55
- perceptions of personal finances a year from now rose two points to 83.
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 January was collected from 418 responses.
