Florida consumer sentiment rose for the third consecutive month in February, climbing 2.4 points to 79.3, as improving views of the national economy helped offset ongoing concerns among lower-income households, according to a new report from the University of Florida (UF).
The February reading was up from a revised 76.9 in January. National consumer sentiment also increased slightly during the month.
While both current conditions and future expectations strengthened, the increase was driven primarily by more optimistic views regarding the national economic outlook over the next year. These positive expectations align with recent economic developments, including easing inflation and a stabilizing unemployment rate, which could allow for further interest rate cuts in the near term following the pause at the end of January,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
All five components of Florida’s index improved, with the largest gain seen in expectations about U.S. economic conditions over the next year, which jumped 4.1 points to 82.5. Expectations for the national economy over the next five years rose 1.8 points to 80.2.
Floridians also reported stronger views of their personal financial situations. Perceptions of current personal finances compared with a year ago increased 2.1 points to 75.1. Opinions on whether now is a good time to buy big-ticket household items, such as appliances or furniture, rose 2.8 points to 69. Expectations about personal finances one year from now edged up 1.3 points to 89.9.
However, the report highlighted a widening divide across income groups. Sentiment among Floridians earning under $50,000 annually declined across three of the five components in February and has fallen by more than 15 points over the past year. Sandoval said persistent inflation and higher borrowing costs tend to weigh more heavily on lower-income households, while higher-income households may benefit from rising asset values.
“Persistent inflation and higher borrowing costs are more likely to affect lower-income households, while higher-income households may benefit from rising asset prices in housing and financial markets,” Sandoval said. “This divergence may be contributing to the widening gap in sentiment across income groups. Importantly, a further widening of this gap could signal reduced spending among lower-income households, which could translate into slower economic growth.”
The survey was conducted from Jan. 1 to Feb. 26 among 372 Florida residents reached by cellphone. Responses were weighted by county, age and sex to reflect the state’s population.
