BEBR in the news

Gainesville's income gap is nation's fifth-widest

The city of Gainesville had the fifth-widest income gap in the country from 2005-09, a United States Census Bureau American Community Survey report released this month says.

David Denslow, a research economist at the University of Florida Bureau of Economic and Business Research, attributed the high level of income inequality to two factors — a relatively small city with a large university and medical complex, and the poverty rate and lack of jobs in east Gainesville.

The University of Florida's contribution to the gap is not a cause for concern, but the depressed economic situation in east Gainesville is, Denslow said.

"The east Gainesville factor, we have been worrying about it forever and need to," he said.

UF factors into the income gap because Gainesville is a city of 115,146 with a university that has approximately 50,000 full-time students. Many of those students report little to no income while the university and the Shands medical complex have professors and doctors with some of the higher incomes in the city, Denslow said.

James Dewey, the BEBR program director for economic analysis, said adding a university the size of UF to what would otherwise be a predominantly rural area would always lead to high income inequality.

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Gainesville's income gap is nation's fifth-widest - Gainesville Sun - October 28, 2011

UF report: Florida’s Consumer Sentiment falls in October

GAINESVILLE, Fla. — After a modest gain in September, Consumer Sentiment among Floridians fell a point in October to 63, four points above the record low of 59 set in June 2008, according to a new University of Florida study.

The index used by UF researchers is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.

“Consumer Sentiment continues to be in the doldrums, uncomfortably near record low levels here in Florida,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research.

That level of confidence may remain stuck for some time, McCarty said, because “there have been no consistent economic developments over the past couple of months to push confidence lower or raise it from its historically low levels.”

The report found that Consumer Sentiment remains shaky despite reports of slight economic improvement in some sectors. Florida’s unemployment rate, for instance, dropped one-tenth of 1 percent to 10.6 percent, after remaining fixed at 10.7 percent for three months, far better than the record high level of 12.5 percent reached in March 2010.

“One thing to keep an eye on is the size of the labor force,” McCarty said. “Unemployment is the percent of those unemployed but looking for work. When people stop looking, for a variety of reasons, they are not counted. Although Florida’s labor force increased by 14,000 from August to September, it is still down 26,000 from September of 2010.”

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UF report: Florida’s Consumer Sentiment falls in October - University of Florida News - October 25, 2011

 

More on this topic:

Consumer Sentiment dips in Florida, plummets in U.S. - South Florida Business Journal - October 25, 2011

Fla. Consumer Sentiment dips to near record low - Miami Herald - October 25, 2011

Florida's Consumer Sentiment dips in October - Sun Sentinel - October 25, 2011

Florida Consumer Sentiment tilts toward record low - WHNT News, Huntsville, AL - October 25, 2011

Consumer Sentiment dips in Florida - Jacksonville Business Journal - October 25, 2011

Florida confidence stuck near lows - Miami Herald - October 25, 2011

Florida's Consumer Sentiment declines along with nation's - Gainesville Sun - October 25, 2011

Florida Consumer Sentiment tilts toward record low - Reuters - October 25, 2011

Consumer Sentiment still near lowest ebb - Herald Tribune - October 25, 2011

Florida Consumer Sentiment slips as holiday buying season arrives - St. Petersburg Times - October 26, 2011

Low Consumer Sentiment hurts holiday sales forecast - Sunshine State News - October 26, 2011

Subsets of CPI produce difference inflation numbers

Something’s rotten in the state of-er Florida.

A public hearing is slated for 6 p.m. Tuesday on plans by the Florida Department of Transportation to raise tolls at all state toll roads and bridges, including Florida’s Turnpike, about 11.7 percent by next June 30.

Under the plan, the cost of a car ride on Florida’s Turnpike from West Palm Beach to Miami’s Golden Glades Interchange, for example, would rise to $4.60 from $3.80. SunPass holders pay $1 less. Reason cited for the toll hike: Inflation, as measured by the Consumer Price Index.

The plan — hitting already financially strapped Floridians — comes after social security recipients finally get a 3.6 percent raise after three years. But that increase, effective in January, is a significantly smaller percentage than the proposed Florida toll increase — despite the fact that it, too, measures the CPI.

Why this huge discrepancy? Is the CPI, as some have argued, subject to manipulation?

Christopher McCarty, director of the Bureau of Economic and Business Research at the University of Florida, doubts it.

“The Bureau of Labor Statistics is fairly impartial and immune from political intervention,” McCarty says.

The most quoted monthly CPI index —CPI-U — measures changes in prices of all goods and services purchased for consumption by urban households. It includes user fees, such as water and sewer service, and sales and excise taxes paid. Excluded: Income taxes and investments, like stocks, bonds and life insurance.

Florida DOT and the Social Security Administration use different versions of the CPI. Florida DOT measures the CPI-U, or annual average of all expenditure items for all urban consumers, U.S. city average.”

By contrast, the social security cost of living adjustment is measured by the rise in the CPI-W, a subset of CPI-U that gives greater weight to urban wage earners and clerical workers.

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Subsets of CPI produce difference inflation numbers - Palm Beach Daily News - October 24, 2011

Wealth gap in South Florida second-widest in US

South Florida is behind only New York in having the widest gap between rich and poor, according to a new Census analysis of major U.S. metropolitan areas.

An influx of wealthy Latin Americans and construction workers thrown out of work by the housing bust led to the wide gap in household incomes in Miami-Dade, Broward and Palm Beach counties, economists said.

The ranking is based on data measuring the range of household incomes from the Census' American Community Survey between 2005 and 2009.

South Florida's income gap widened in part because wealthy Brazilians and other Latin Americans are moving in, said Chris McCarty, director of the University of Florida's Bureau of Economic and Business Research.

Brazilians especially have more cash, he said.

"Brazil has one of the healthier economies in the world," McCarty said.

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Wealth gap in South Florida second-widest in US - Sun Sentinel - October 28, 2011

How Will Consumer Sentiment Affect Year-end Spending?

As September draws to a close, the holiday season will soon be upon us. It is also the traditional time when consumer spending surges make the annual difference between retailers reaching profits or red ink. But according to a recent consumer study conducted by Princeton Survey Research Associates on behalf of BankRate.com, many consumers have already begun tightening household budgets.

“Forty percent of Americans say they have cut back on spending over the past 60 days due to the roller-coaster stock market or concerns about the economy”, says Greg McBride, Bankrate’s senior financial analyst. “This type of widespread cutback in consumer spending, if sustained for any length of time, is how recessions are born.”

Beyond consumer spending, the study also compared consumer comfort levels today against those of 12 months ago in four other measures: debt, savings, job security and net worth.

Job security was perhaps the worst measure. More than half – 60 percent – job security is as elusive now as it was last year. Conversely, only 16 percent felt their jobs were safer today.

David Denslow, Jr., a distinguished service professor in the Department of Economics at the University of Florida and a research economist for the Bureau of Economic and Business Research offered his interpretation on lingering job insecurity.

“This increased concern ranges from dropouts to college graduates, from the less-skilled to higher earners, from the young to those approaching retirement. And it is remarkable for the beginning of the third year after the official end of a recession. The third years of the previous two recoveries saw rapid job gains. This time may be different.”

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How Will Consumer Sentiment Affect Year-end Spending? - Black Voice News, California - September 26, 2011

Wausau-area snowbirds prep for annual migration

Milt and Kay Olson spend every Christmas in north central Wisconsin with their children and grandchildren, enjoying a meal together, sharing stories of Christmases past and exchanging gifts. Then they take down the Christmas tree, load up the fifth-wheel trailer and head south to escape the below-zero temperatures and snow.

The Olsons, who live in the town of Weston, are some of the more than 1 million "snowbirds" in the U.S. and Canada who flee winters in colder climes for Florida, Arizona, Gulf Shores, Ala., and other refuges. Snowbirds flee the frozen north to live in retirement communities, RV parks and condominiums where they walk the beaches, play golf and participate in other social activities while Wisconsin residents count the days until summer.

The Olsons stay in Wisconsin longer than most snowbirds, who typically are getting ready to hit the road right about now -- as leaves turn and temperatures drop near freezing at night. The recession, high gasoline prices and a struggling housing market haven't slowed the migration.

Tracking the number of snowbirds is difficult because studies are inconsistent and dated. A University of Arizona State study found that more than 300,000 winter residents were living in Arizona at the height of the 2002-03 winter season. A University of Florida study showed that 818,000 people spent the winter of 2005 in that state.

Stefan Rayer, a researcher for the Bureau of Economic and Business Research at UF who conducted the 2005 study, said the economic downturn and high unemployment likely have caused that number to drop slightly in recent years. "The pull to Florida has stopped somewhat," Rayer said.

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Wausau-area snowbirds prep for annual migration - Wausau Daily Herald, Wisconsin - September 24, 2011

Seniors' depression over economy may bode ill for Perry

The survey results are in and Florida's old folks are scared out of their wits.

That should give pause to the Republican presidential candidates preparing to debate in Orlando on Thursday.

Normally, voters throw out the bum presiding over a bad economy. But things are so historically bad that shell-shocked seniors may cling to President Barack Obama like a security blanket if they see Republicans threatening their entitlements.

I turn your attention to a monthly survey of consumer sentiment done by business researchers at the University of Florida. It breaks out responses for those over and under the age of 60.

In August, Floridians overall were in a depressed state of mind, indicative of a recession. Leading the funk were seniors, whose sense of economic well-being plunged from July.

Call it a coincidence, but last month is when Rick Perry entered the presidential race. And his depiction of Social Security as a "Ponzi scheme'' and "unconstitutional" got widespread attention.

Obviously the worsening economy played a role in the numbers. But consumer sentiment among those under the age of 60 fell by much less than the older group.

Something else is gnawing on the minds of seniors.

"The fact is Social Security and Medicare now are routinely part of the national conversation and that never happened before," says Chris McCarty, who directs the UF survey. "The reform proposals say people in retirement and near retirement would not be affected. People probably don't trust that."

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Seniors' depression over economy may bode ill for Perry - Orlando Sentinel - September 19, 2011

Florida’s poverty rate rises

More than one in six Floridians are living poverty — the highest it has been in more than a decade, according to Census figures released this week.

Sixteen percent of Floridians were below the poverty level in 2010, up from 14.6 percent in 2009 reflecting a continuation of a steady climb in recent years. Florida’s 2010 rate is the highest it has been since 1995 when it was 16.2 percent.

Florida’s poverty rate was slightly above the nation’s official poverty rate of 15.1 percent, up from 14.3 percent in 2009 and the third consecutive annual increase, according to the Census bureau. That rate was the highest since 1993 but was 7.3 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available, according to the Census bureau.

The poverty information was based on a survey of about 100,000 households and is used to set the national poverty rate. Later in September the census bureau will release more detailed poverty information through the American Community Survey based on a survey of about three million households. That information will include poverty rates for large cities including Miami and Fort Lauderdale.

The census data reflects the first full calendar year after the December 2007-June 2009 recession.

"Given the state of the economy the last couple of years, you would expect the poverty rate to increase nationwide and in Florida," Stefan Rayer, a research demographer at the Bureau of Economic and Business Research at the University of Florida, said in an email. "While the 2010 poverty rate in Florida is higher than during the last decade, there were several years since 1980 when the rate was higher still (16.2 in 1995, 17.8 in 1993, 16.6 in 1981, and 16.7 in 1980). ... When the national poverty rate is high, Florida’s poverty rate is often somewhat higher but lower than that of other states in the South."

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Florida’s poverty rate rises - Miami Herald - September 13, 2011

Social Security concerns unnerve Florida seniors

MIAMI (Reuters) - Florida seniors were so rattled by proposed changes to Social Security emerging in the U.S. political debate that their Consumer Sentiment levels plunged more than that of any other age group in August, an economic survey showed.

And that was before Texas Governor Rick Perry called the popular retirement program a "Ponzi scheme" during last week's debate among Republican presidential candidates.

It would be difficult to overstate the impact of Social Security in Florida, a longtime retirement haven that is the most populous of the political swing states.

Consumer Sentiment among Floridians over 60 plunged nine points to 57 in August, according to the latest monthly survey conducted by the University of Florida's Bureau of Economic and Business Research.

It was the biggest drop among any age group in the survey, which put the overall Florida confidence score at 62, barely above recession level.

"A lot of that had to do with the frank and open candidate discussions about including modifications to Social Security and Medicare as part of the solution" during the contentious debt limit debate in July and early August, said bureau director Chris McCarty, who conducted the survey.

"As the discussions and the media attention and all that rolled out, people became increasingly nervous. ... In Florida, obviously, we're disproportionately seniors."

Social Security is funded by payroll taxes and has not contributed to the deficit, but it has increasingly become a target of politicians who want to reduce the size and role of government. Prospective changes in Medicare, the government health insurance program for the elderly, and in military retirement benefits also weigh heavily in Florida.

"NO CLARITY"

"There's absolutely no clarity about what will happen," McCarty told Reuters. "That's why seniors are so gloomy, particularly for those folks who are completely dependent on those entities. Many of them don't have an option of doing something else."

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Social Security concerns unnerve Florida seniors - WKZO AM 590-FM 96.5 - September 12, 2011

Economists' forecast starts to reflect public sentiment

The National Association for Business Economics has trimmed its forecast for U.S. economic growth to 1.7 percent from 2.8 percent.

NABE cites a laundry list of reasons for revising its forecasts lower, including low consumer and business confidence, uncertainty about future economic policies, a weak housing market and tight credit. The association’s panelists say they are also very concerned about high unemployment, the federal deficit and the European debt crisis.

The forecast would not be a surprise to many Floridians. Consumer Sentiment in the state decreased to a near-record low in August, according to a University of Florida survey. The mark of 62 is only three points higher than the record-low 59 set in June 2008.

“If past history of this index is any indication, we are in, or at least very near, a recession," said Chris McCarty, director of UF's Bureau of Economic and Business Research, when it was issued. "We are not likely to know for certain until after the fourth quarter.”

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Economists' forecast starts to reflect public sentiment - South Florida Business Journal - September 12, 2011