Highest jobless rate in three decades causes drop in consumer confidence

GAINESVILLE, Fla. — Florida’s consumer confidence fell three points to 69 in November amid continued concerns over the state’s high unemployment rate, according to a new University of Florida survey.

“We had expected consumer confidence to fluctuate in the upper 60s to low 70s for the next several months, so a decline was not a surprise,” said Chris McCarty, survey director of UF’s Bureau of Economic and Business Research. “There are reasons for growing pessimism, particularly lingering employment issues that are expected to get worse over the next several months.”

Florida’s unemployment level increased to 11.2 percent in October, the highest rate in 34 years, McCarty said.

“Perhaps more disturbing is the rising percentage of the long term unemployed – those who are unemployed for six months or more – who are dependent on an extension of unemployment benefits and may have continued difficulty finding work,” he said.

This group accounted for 1.79 percent of the United States population in September, compared with 1.2 percent following the recession in 1982, he said.

“The biggest surprise in this report was the very sharp decline in perceptions of the economy in the long run,” McCarty said. “Florida consumers may be wondering whether the effects of this downturn will last longer than usual, or perhaps some aspects of this downturn are permanent.”

McCarty said he expects holiday retail sales to remain flat compared with a year ago, and he foresees no clear improvement in consumer confidence before the second quarter of 2010, if not later.

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Highest jobless rate in three decades causes drop in consumer confidence - University of Florida News - November 24, 2009

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