Fla.’s consumer confidence drops amid ‘fiscal cliff’ concerns

Floridians’ consumer confidence fell in November, after having risen to five-year highs the previous two months, according to a University of Florida survey released Tuesday.

Blame the confidence drop on the Nov. 6 election andworries that Washingtonwon’t come to an agreement that avoids the federal budget’s “fiscal cliff,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research.

Confidence fell sharply among the state’s Republicans, while Democrats were feeling slightly more confident this month, according to his analysis.

“Florida was the most divided state in the country, with President Obama winning by 73,309 votes. No matter who won, half of the state was not going to be happy with the outcome,” McCarty noted.

The UF survey and index shows Floridians are concerned about the lack of a resolution to the sharp increases in federal taxes and deep government spending cuts that are to take effect at the end of the year unless Congress and the White House agree to a compromise, McCarty said. The Bush tax breaks are due to expire Dec. 31, while spending cuts mandated by the Budget Control Act of 2011 take effect Jan. 1.

There’s a “clear danger” to the economy if Washington doesn’t come to an agreement, University of Central Florida economist Sean Snaith warned Tuesday in his final U.S. forecast for 2012.

For now, Snaith is still projecting that Florida’s economywill growduring the first three months of 2013. But he said he might have to revise that forecast if Washington doesn’t come to an agreement.

Floridians’ confidence in the economy and their finances, while down from October, remains near five-year highs — significantly higher than it was during the Great Recession, McCarty said. Consumer confidence nationwide is also near a five-year high, according to the nonprofit Conference Board, which also released its U.S. consumer-confidence survey Tuesday.

Florida’s consumer-confidence index fell this month to 76, down four points from a revised October reading of 80, the UF sur- vey found.

Four of five components used in the survey declined. Respondents’ overall view that they are better off financially than a year ago fell. So did their expectations that their personal finances will rise by this time next year. And Floridians’ confidence in the U.S. economy, both over the short term and the long term, also dropped.

“Only one component showed no decline,” McCarty said. Perhaps because of the holiday season and widespread sales, Floridians said now was a good time to buy an expensive consumer item, such as an appliance.

McCarty said he expects holiday sales to increase a modest 2 percent, as predicted by the Ball State Center for Economic and Business Research.

The UF survey of 420 Floridians was conducted from Nov. 12 to 21. The index used by UFresearchers is bench-marked to 1966, which means a value of100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.