As Washington threatens another financial calamity, Floridians are feeling less optimistic about the economy.
Consumer confidence in Florida ticked down a point this month, according to preliminary survey numbers from the University of Florida. That tiny change wouldnt mean much, but Tuesdays release continues a three-month trend of declines. In May and June, the UF index hit a five-year high of 81, but crept down to 76 in September.
The change comes as the hiring landscape in Florida hits a rough patch while housing values continue their monthly surge. But worries are rising that an impasse between Republicans and the White House will lead to either a shutdown of the federal government as early as next week or a broader fight over whether to increase the national debt ceiling. A failure to lift the borrowing limit, which the Treasury Department estimates will be met next month, could lead to the United States missing debt payments for the first time in its history if Washington doesnt opt to divert money away from other needs to pay creditors.
Chris McCarty, who runs the survey for UF, noted the September numbers were dragged down by growing pessimism among lower-income residents and seniors, two groups that rely on Washington for income assistance and medical aid. He said the latest confidence numbers confirm a slowing trend in the economy, both in Florida and nationally. He said a budget crisis in Washington could end the current recovery, which officially began at the end of the 2007-09 recession.
We have actually been experiencing fairly steady, yet weak, growth for the past four years, McCarty said. A government shutdown of even a short duration would likely be enough to trigger another recession.
In Florida, the unemployment rate dipped slightly last month to 7 percent, but a shrinking pool of job seekers masked a decline in the number of employed people. Real estate continues to make gains. On Tuesday, the S&P/Case-Shiller index showed home values in South Florida, the largest housing market in Florida, are up 14 percent for the year.
The UF numbers came out the same day as a similar national survey also showed a drop in consumer confidence. The Conference Board reported that September saw a two-point drop in its index, hitting its lowest point since June. Chris Christopher, an analyst for IHS Global Insight, wrote in a research note that theres not much potential for a sudden dose of optimism this fall.
Looking ahead on the consumer confidence front there are considerable headwinds, Christopher wrote. Political bickering and finger pointing over the debt ceiling and possible government shutdown is not a positive for consumer mood and spending, especially in the fourth quarter when holiday retail sales are vital to many retail channels.