Despite strong performance, Floridians less confident in economy than rest of nation

by | Aug 7, 2023

  • Florida consumer confidence declined by 2.1 points in July to 66.8, despite a stable unemployment rate and a growing labor force.
  • The drop in confidence was attributed to increased pessimism about spending intentions and the national economic condition, particularly among those earning less than $50,000 annually.
  • All five components of the sentiment index saw a decline in July, including perceptions of current financial situations and future economic perspectives. Pessimism on spending was consistent among Floridians.

In contrast to rising national consumer sentiment, Florida consumer confidence dipped 2.1 points in July to 66.8 from June’s revised figure of 68.9. The decline occured despite a stable unemployment rate of just 2.6% in Florida since January and a labor force surpassing 11 million workers for the first time in June.

The study has been conducted by the University of Florida every month since 1985.  Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research, expressed concerns over the direction of this month’s data.

“Floridians have grown more pessimistic in July due to spending intentions and expectations about the national economic condition,” Sandoval said. “This unease is particularly pronounced among those earning less than $50,000 annually.”

Breaking down the components of the sentiment index, all five saw a drop in July: Floridians’ perception of their current financial situation in comparison to a year ago edged down from 59.9 to 59.8. Women and those with an annual income exceeding $50,000 had a more positive view. Meanwhile, opinions on purchasing significant household items like appliances experienced the steepest decline, dropping 4.5 points from 62.5 to 58. A decline of this magnitude hasn’t been seen since October 2021. Notably, this pessimism on spending is consistent across the board among Floridians.

Additionally, July witnessed a negative shift in Floridians’ future economic perspectives. Expectations of personal finances a year from now slipped from 82.7 to 81.9. Furthermore, the outlook for U.S. economic conditions in the coming year fell 3.1 points, with the five-year forecast decreasing by 2.1 points. Interestingly, men and those earning above $50,000 annually maintained a more optimistic stance.

Sandoval offered insight into the broader economic picture.

“Inflation has been on a steady decline since its 9.1% peak last summer and was at 3% in June. This decrease is promising and might cause the Federal Reserve to reconsider hiking interest rates, reducing the risk of a recession.”

However, Sandoval also highlighted the inflationary challenges, with places like South Florida and the Tampa Bay area registering 6.9% and 7.3% respectively in recent months. Such consistent price hikes can induce further uncertainty. “If inflation in Florida remains controlled, we anticipate a gradual uptick in consumer sentiment in the coming months.”

The study, conducted from June 1 to July 27 by the University of Florida, encompassed a total of 503 individuals, both through cellphones and online panels. This research, benchmarked to 1966 levels, uses an index where 100 symbolizes the confidence level of that year, with the range being from 2 to 150.


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