Drop In Consumer Confidence Doesn't Keep Floridians From Spending
Consumer confidence in Florida dropped this month, but retailers were busy over the Thanksgiving/Black Friday weekend.
The National Retail Federation says more people went shopping on Black Friday this year than ever before.
University of Central Florida Economist Sean Snaith says shoppers may just be more budget conscious and eager to take advantage of big sales.
“So you see this surge of activity, but then as the rest of the holiday season plays itself out, that sort of vigor and momentum is lost,” Snaith says.
He blames the November decline on several factors like high unemployment and negative ads leading up to the election.
Plus, he says declines in consumer confidence don’t always lead to less spending.
For example, as consumer confidence dropped last year, car sales rose.
“If you’re truly not confident about your economic outlook or your financial future,” Snaith says, “you don’t go out and buy a new car. So we saw a bit of a disconnect there.”
Snaith says consumers are also increasingly concerned about the looming fiscal cliff.
But he thinks lawmakers in Washington will stave off the combination of tax increases and spending cuts scheduled after the New Year.
“I think we’ll see - barring the fiscal cliff and barring a complete meltdown in Europe – a recovery that will continue,” Snaith says. “It’ll continue in the same vain that it has been proceeding and that is a sort of below par, slow, tepid recovery.”
Snaith says if the tax hikes are allowed to go into effect, that will almost certainly knock the U.S. economy back into a recession.