Florida’s consumer sentiment hits unexpected snag

by | Apr 2, 2024

Florida’s consumer confidence dropped in March, breaking a five-month rising trend and contrasting with an improving national outlook.

In an unexpected shift, Florida’s consumer confidence dipped in March, ending a five-month streak of increases and diverging from a positive national outlook.

The Consumer Sentiment Index in Florida fell 2.1 points to 72, down from February’s revised figure of 74.1, according to the University of Florida’s Bureau of Economic and Business Research. The decline stands in contrast to the national consumer sentiment, which improved by 2.5 points.

“The drop in consumer sentiment was largely driven by Floridians’ views on their personal financial situation a year from now, which plummeted sharply in March. Additionally, expectations about the country’s economy over the next year dropped as well. While we anticipated a slight increase in consumer sentiment rather than a reversal, the decline suggests that Floridians may be growing more concerned about future economic conditions,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

This concern is partially attributed to higher-than-expected inflation in the early months of the year, leading the Federal Reserve to hold interest rates steady, potentially delaying rate cuts that could stimulate the economy.

“This concern aligns with the higher-than-anticipated inflation observed in the first two months of the year, which prompted the Federal Reserve to keep interest rates steady and might prolong the need for rate cuts in the near future,” Sandoval added.

The report reflected declines across all five components of the Consumer Sentiment Index. Floridians expressed more pessimism about their current economic conditions, including their personal finances compared to last year and the advisability of purchasing major household items.

The most significant drop was in expectations for personal financial situations a year from now, which fell sharply. This sentiment was broadly felt but was particularly pronounced among women and individuals older than 60.

Expectations for the national economy over the next year and the next five years also declined, with variations in views across different demographic groups. People with lower incomes and older individuals tended to have slightly more favorable views on long-term economic conditions.

“Looking ahead, though the downturn spans only a single month, it is worth watching as changes in sentiment could influence consumer spending patterns and overall economic activity in the months to come,” said Sandoval.


%d bloggers like this: