Floridians’ consumer confidence appears to be on the rise, but don’t make plans to cash in on the improving economy just yet.
Florida’s level of consumer confidence increased by 7 points in January, according to a survey by the UF Survey Research Center in the Bureau of Economic Business and Research.
It jumped to 77 points this month, compared to a score of 70 in December. It’s the highest survey number since April.
While the increase was unexpected, it may not be indicative of a major shift in consumer confidence levels, said Chris McCarty, survey director for the UF Survey Research Center.
“You don’t want to make a whole lot of decisions when it swings this quickly based on one month,” McCarty said. “I suspect we’re going to look back at it, and it will be an anomaly.”
For example, confidence was at a high in April, but quickly dropped after the BP oil spill occurred.
The confidence increase in Florida was mirrored by a nationwide increase reported by the Conference Board Consumer Confidence Index. In the U.S., the index jumped from 53.3 in December to 60.6 this month.
Factors in the confidence increase may include a healthy U.S. stock market and media reports providing a positive outlook on the future of the country’s economy and unemployment rate, he said.
While McCarty isn’t convinced the state or country will dramatically decrease unemployment rates for at least the next year or two, some believe improvement is just around the corner.
To truly improve the unemployment problem, at least 6 percent of the unemployment rate in Florida needs to be eliminated, McCarty said. He doesn’t expect that to be achieved for at least another couple years.
But expectations for corporations to begin creating new jobs soon may have contributed to the spike in consumer confidence, he said.
McCarty expects federal budget cuts and Gov. Rick Scott’s announcement of his budget plan to affect consumer confidence levels. Whether Florida’s consumer confidence will continue to increase will probably remain uncertain until February’s survey is completed, he said.
Cleber Correa, finance chair of Delta Sigma Pi, a professional business-focused fraternity at UF, believes the January survey results are the beginning of a more long-term upswing in consumer confidence in Florida and the nation.
If unemployment numbers decline and the stock market continues to do well, consumers should grow more confident in the economy over the next several months, he said.