UF research center finds increase in consumer confidence, discusses effect
Consumer confidence has reached the highest level in five years this past month, according to a recent study by the University of Florida Survey Research Center. The opinion poll received its first 79-point score since October 2007.
Christopher McCarty, director of the research center and director of the University of Florida’s Bureau of Economic and Business Research, said consumer confidence plays a large roll in separating Obama backers from Romney backers.
“As we mentioned in the release, there’s a big difference between Obama supporters and Romney supporters,” he said. “Obama supporters tend to be much more optimistic about the economy than Romney supporters.”
McCarty said the fiscal cliff issue, a combination of a set of tax cuts that are expiring and spending cuts going into effect in January, would develop during the presidential debates. However, he said, the fiscal cliff discussion has yet to make an impact on consumer confidence.
The tax and spending cuts are fairly severe, McCarty said, and the way the two candidates deal with the discussion and impact will differ. Obama and Romney supporters differ in consumer confidence because of some core beliefs and values.
“I suspect that some of Obama’s supporters are folks that benefit from some of the entitlements that are probably on the table when we get into discussions about the fiscal cliff. So the ways that those are handled may be more positive that he’s currently in office and looking forward to being in office,” he said. “Whereas I think Romney’s supporters disagree with the spending and they don’t like the way we’ve gone about spending in country and they look forward to change in that way.”
Nonetheless, there are signs of positive growth in the economy. Housing prices are on the increase, nowhere near the peak of housing prices in 2006, but they are at a post-recession high, he said.
The stock market growth and unemployment rates are also positive signs of the economic state. McCarty said the market is getting closer to the high it reached in 2008 prior to the collapse and unemployment, though it has been stagnant lately, is going down below the level it had been.
The price of food and gas will also have an effect on consumer confidence, he said.
Gas prices were declining at one point in a cyclical manner that did not follow a normal pattern. Now, McCarty said, gas prices have gone back up and will continue to become higher over the next several years.
Food prices, he said, are going to go up over the next couple of years as a result of the drought this past summer. The price increase will be most visible in the meat industry.
“Meat prices have been down mostly because those who have been manufacturing the meat have been frankly slaughtering the cattle in anticipation of not having grain supplies,” he said. “For now, we actually have an ample supply of meat but as we move into next year that’s going to be a problem.”
Though, the fiscal cliff, the changes in gas and food prices and the presidential debates on behalf of these issues will not necessarily make an impact on consumer confidence because of preconceived economic opinions, he said.
“A lot of people have already made up their mind about where they’re at with the economy.”
Kelsey Meany wrote this story online.