Increasing gloom about the global economy seems to be rattling the Sunshine State, too. Confidence among Florida residents dropped sharply in the latest survey, just as the nation renews its fears of another downturn.
The University of Florida’s monthly reading of consumer confidence throughout the state took a dive in June, with all of the indicators down from May. Though Florida remains more confident than this time last year, the retreat comes amid growing signs of worry nationally that the economy will take a turn for the worse.
“Consumer confidence is digging deeper into recession territory,’’ IHS Global Insight economist Yinbin Li wrote in a note to clients Tuesday morning after the Conference Board reported a national index fell for the fourth month in a row. The drop comes “as many Americans see their job prospects dim, their household net worth take a beating, and the European debt crises send jitters through the equity markets.”
In Florida, consumer confidence has been on almost as rough a streak, dropping for five of the last six months. The May reading dropped four points from April, the sharpest decline since August 2011, amid the drama surrounding a downgrade of U.S. creditworthiness and fears of a government shutdown tied to the debt-ceiling fight.
The current UF confidence reading is 74, which is still eight points higher than a year ago. Throughout 2011, the UF reading hovered in the 60s, but it was in the 80s during 2008 in the run-up to the financial crisis.
Confidence recovered briefly in May throughout Florida, but UF survey director Chris McCarty attributed that to relief over lowering gas prices. He noted that encouraging news on housing — Case-Shiller reported Tuesday that South Florida home values are up about 3 percent this year — seems to be losing out to more worrisome global issues. Still, McCarty said he did not expect more sharp drops in confidence, given the good news coming on fuel costs.
“Fortunately gas prices are expected to continue to decline, although at a slower pace, in the next few months,’’ McCarty wrote in a news release announcing the results. “This should help to maintain confidence somewhere near its current level.”
The Miami Herald’s Economic Time Machine tracks 60 local indicators in an effort to chart South Florida’s recovery from the Great Recession. By comparing current conditions to where they were before the downturn, the ETM attempts to measure how far back the recession set the economy. The answer so far: June 2003. Visit ETM headquarters at miamiherald.com/economic-time-machine for the latest updates.