RISMEDIA, February 26, 2009-(MCT)-As hopes dimmed that the nation would find a quick fix for the troubled economy, nationwide, consumer sentiment plunged to an all-time low, the Conference Board reported Tuesday. There also was a new report that home prices tumbled at a record rate nationwide last year.
The University of Florida says its index of Florida consumer confidence fell three points to 63 between January and February. That reading is just four points higher than the all-time low of 59, set last June.
Survey research director Chris McCarty of the university’s Bureau of Economic and Business Research said the state’s confidence indicator fell because “the novelty of a new administration met with the sustained reality of a faltering economy.”
The Florida index has five parts, and each one declined. They are: Expectations for the nation’s economy a year from now; expectations for the U.S. economy over the next five years; expectations about personal finances one year from now; current perceptions of personal finances; and consumers’ view on whether now is a good time to buy big-ticket consumer goods.
Nationwide, the Conference Board said its consumer confidence index, which was down slightly in January, plummeted more than 12 points in February to 25. That’s the lowest number in 42 years.
The index, which has been compiled since 1967, had hovered in the high 30s the past few months. A year ago, the consumer confidence reading stood at 76.4.
Lynn Franco, director of The Conference Board Consumer Research Center, said the report showed worries about inflation, which had eased over the past several months, picked up.
Economists carefully monitor people’s confidence in the economy since consumer spending accounts for more than two-thirds of economic activity.
Both attitudes and spending have been hammered by high unemployment, overall economic uncertainty and sharply falling home values.
The Standard & Poor’s/Case-Shiller U.S. National Home Price Index, also released Tuesday, showed that conditions in the housing market deteriorated further.
The national home index plunged 18.2% during the quarter from the year-ago period, the largest drop in its 21-year history. Prices are now at levels not seen since the third quarter of 2003.
For the Miami metro area, including Palm Beach and Broward counties, the one-year decline was 28.8%.
Consumer attitudes won’t improve until consumers see a clear signal that things are improving, McCarty said.
“There is no doubt that we will be working through this recession through this year and into 2010,” he said.
Copyright © 2009, Sun Sentinel, Fort Lauderdale, Fla.
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