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Politics

Florida Consumer Confidence Stalls in Face of National Fiscal Cliff

December 26, 2012 - 6:00pm

With the nation posed to teeter over the fiscal cliff, consumer confidence has dropped six points since hitting a post-recession high before the general election.

The monthly confidence number, calculated by the University of Floridas Survey Research Center in the Bureau of Economic and Business Research, remains unchanged from November as the nation waits for its government to hammer out an economic plan.

Political ideology remains a big factor in how the numbers have swayed, as is age, with younger Floridians tending to be more optimistic about the future of the economy and expectation of personal finances.

In November there was a clear reaction to the outcome of the election with confidence among Democrats increasing and confidence among Republicans decreasing, Chris McCarty, director of the UFs center, stated in a release on Thursday.

In December that is still true, with confidence among Republicans at 49 and among Democrats at 103, about the same as November.

While there are positive signs about Floridas economy, any recovery is jeopardized if Congress allows scheduled tax increases and spending cuts to occur, McCarty noted.

Hitting the cliff could result in less spending, fewer vacations in a state that is heavily reliant on tourism as tax refund checks are delayed, take-home pay is lessened as a reflection of the end of Bush and payroll tax cuts, and seniors struggle with Medicare cuts up to 27 percent.

The effects would be most pronounced around cities with military bases, such as Pensacola, Jacksonville and Tampa, McCarty added.

Using a scale that marks 100 as the benchmark, Florida sat at 74 in December.

Worry about the federal budget falling off the fiscal cliff has drawn more pessimism to individuals' beliefs about their short-term finances since the overall number hit a recent high of 80 in September and October.

However, consumers appear to see past the short-term pain of the tax increases and spending cuts and are a little more optimistic about the future over the next five years, McCarty said.

That figure rose one point to 78. In addition, the perception that they are better off economically today than a year ago rose three points to 61.
Finally, the survey-takers assessment that the present is a good time to buy big-ticket items, such as a washing machine, rose six points to 84.

The latest numbers come as signs of economic recovery abound in Florida.

Gas prices in November were declining. The median price for a single-family home rose in Florida to $150,000 in November, up from $145,000 in October. Housing sales are brisk in most markets. The states unemployment level fell again in November by 0.4 percent to 8.1 percent, marking the lowest level since the recession ended. The gap between Florida and U.S. unemployment is now only 0.4 percent.

Most economists believe that without the fiscal cliff, the economy is on a solid path to recovery, McCarty stated.

Reach Jim Turner at jturner@sunshinestatenews.com or at (772) 215-9889.

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