Consumer sentiment in Florida reached a two-year high at the outset of 2024, buoyed by positive economic expectations and a robust labor market

Consumer sentiment in Florida reached a two-year high at the outset of 2024, reflecting growing optimism about the state’s economic prospects and potentially signaling increased spending patterns in the months ahead.

According to the latest survey from the University of Florida’s Bureau of Economic and Business Research, the Consumer Sentiment Index climbed to 72.8 in January, up from a revised December figure of 69.5. The growth is primarily attributed to positive expectations regarding the national economy and the absence of an anticipated recession last year. A labor market with low unemployment rates and decreasing inflation, alongside the potential for interest rate cuts by the Federal Reserve, supplements positive economic forecasts.

“Contrary to expectations, the anticipated recession failed to materialize in 2023,” said Hector Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “Instead, a remarkably robust labor market, with unemployment at its lowest, boosted consumer spending, contributing significantly to the growth of the economy. Moreover, inflation has continued to ease in recent months. As a result, the Federal Reserve is poised to consider interest-rate cuts in the year ahead, providing further support to the economy and maintaining the economic expansion through 2024.”

Within the report, men reported a higher sentiment index at 77.2, reflecting a more optimistic view of the economy and their financial situations than women, who recorded a lower index at 68.8. Age-related disparities were also noted, with individuals under the age of 60 showing a sentiment index of 75.1, while those aged 60 and over had a sentiment index of 69.6. Income levels further delineate consumer sentiment, with those earning over $50,000 annually displaying a higher index of 75.1, with those earning incomes under $50,000 showing a sentiment index of 68.8.

Anticipations for personal financial conditions next year improved by 3.9 points, from 81.6 to 85.5. Views on the U.S. economy for the upcoming year also increased significantly, by 5.1 points from 71.6 to 76.7, marking the month’s largest gain. This metric has grown by over 10 points in the last two months. Expectations for the U.S. economy over the next five years similarly rose by five points, from 76.5 to 81.5.

“Overall, Floridians start the year with optimism. The increase in consumer confidence, particularly regarding future economic outlooks, indicates robust consumer spending, which will keep the favorable economic outlook in the upcoming months,” said Sandoval. “Looking ahead, we expect further positive shifts in consumer confidence in the months ahead, particularly if the Fed interest-rates cuts materialize sooner rather than later.”