Florida’s consumer sentiment index slightly rose to 73.2 in June from 73 in May, with mixed views on economic conditions influenced by persistent inflation and high interest rates, while lower-income Floridians continue to express more pessimistic outlooks.
Florida’s consumer sentiment index experienced a slight uptick in June, rising to 73.2 from a revised figure of 73 in May, according to the latest report from the University of Florida’s Survey Research Center.
During the first half of the year, Florida’s consumer confidence fluctuated without achieving significant overall gains, thus slowing the upward trend observed in the latter part of 2023, Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research noted. Currently, consumer sentiment in Florida is 4.3 points higher than a year ago and 12.2 points higher than two years ago, when confidence remained near some of the lowest levels on record. Sandoval attributed the muted improvement to higher-than-expected inflation and the Federal Reserve’s decision to maintain interest rates at historically high levels.
The June metrics juxtapose the national trend, where consumer sentiment has been on the decline for the third consecutive month, dropping nine-tenths of a point.
The Consumer Sentiment Index comprises five components, of which two showed increases and three showed decreases in June. Floridians’ opinions about current economic conditions were generally pessimistic. Views on personal financial situations compared to a year ago decreased from 59.8 to 58.8, with more favorable views expressed by men, people under 60, and those with annual incomes over $50,000. Confidence in making major household purchases, such as refrigerators, declined slightly from 62.0 to 61.8, with optimism noted among women, older individuals, and higher-income earners.
Despite the modest rise, expectations about future economic conditions were mixed. The largest increase was seen in expectations of personal financial situations a year from now, which rose from 85.3 to 87.9. Men and those with annual incomes under $50,000 were more pessimistic about their financial future. Expectations for U.S. economic conditions over the next year decreased from 76.1 to 75.1, while long-term expectations for the next five years slightly increased from 82.0 to 82.4. Older individuals, higher-income groups, and women exhibited more optimism regarding long-term economic conditions.
The report highlighted a trend among lower-income Floridians, who consistently expressed more pessimistic views across all five components. Sandoval pointed out that lower-income individuals face increased financial strain, allocating a larger portion of their income to essentials such as housing costs. This strain has worsened due to persistent inflation and higher borrowing costs, contributing to their gloomy outlook.
“It’s noteworthy that people with an annual income under $50,000 consistently expressed more pessimistic views across all five components and were particularly gloomy regarding expectations one year from now. Lower-income individuals face increased financial strain, allocating a larger portion of their income to essentials like housing costs. This strain has worsened due to persistent inflation and higher borrowing costs, contributing to their disconsolate outlook,” Sandoval wrote in the report.
However, there is a glimmer of hope as inflation in the Tampa area eased to 1.8 percent in May, below the Federal Reserve’s 2 percent target, potentially signaling statewide relief.
“Looking ahead, as the U.S. presidential campaigns intensify, fluctuations in consumer sentiment are common, influenced by economic forecasts and speculation about each candidate’s potential policies. However, as long as the Fed maintains its current stance on interest rates, we do not expect significant changes in consumer confidence in the months ahead,” said Sandoval.
The survey, conducted from May 1 to June 27, 2024, involved 551 respondents, combining cellphone and online panel responses. The index, benchmarked to 1966, ranges from a possible low of 2 to a high of 150, with 100 representing the same level of confidence as that year.