May sees slight decline in consumer confidence, though older Floridians express optimism

by | Jun 4, 2024

Florida’s consumer sentiment in May dipped slightly to 73.1 from April’s revised 73.3, driven by perceptions of current economic conditions despite steady inflation rates and low unemployment, with mixed views on future economic prospects and notable optimism among those aged 60 and older.

Florida’s consumer sentiment saw a slight dip in May, falling to 73.1 from April’s revised figure of 73.3, according to the University of Florida’s Economic Analysis Program, and contrasting an 8.1-point drop in national consumer sentiment.

Hector H. Sandoval, director of the program at UF’s Bureau of Economic and Business Research, attributed the decrease to Floridians’ perceptions of current economic conditions. Despite inflation nearing the Federal Reserve’s 2 percent target after peaking at 9.1 percent in 2022, progress in reducing inflation has slowed, necessitating that Floridians continue to adjust their budgets and spending plans.

The inflation rate remained steady at 2.7 percent in April, according to the Fed’s preferred measure. Meanwhile, unemployment rates have held below 4% at both national and state levels, indicating that a “soft landing” — disinflation without triggering a recession — is still anticipated, Sandoval noted.

The index, comprising five components, showed a mixed performance in May, with two components showing an increase and three a decrease. Floridians’ views on current economic conditions deteriorated, as the assessment of personal financial situations compared to a year ago dropped from 61.2 to 59.9, and the perception of whether it is a good time to buy major household items fell from 63.9 to 62.3. The declines were more pronounced among those under 60 and individuals earning over $50,000 annually, while people aged 60 and older held more favorable views.

Expectations for future economic conditions were mixed, with the anticipation of personal finances a year from now increased from 82.6 to 85.3, though this optimism was not uniformly distributed. Younger individuals and those with higher incomes reported less favorable expectations. Similarly, the outlook for U.S. economic conditions over the next year saw a slight increase from 76.2 to 76.3, while the five-year outlook decreased from 82.6 to 81.9. Women and younger individuals expressed more pessimism about short-term national economic prospects, whereas older Floridians and higher-income groups held a more positive long-term view.

Notably, Floridians aged 60 and older expressed greater optimism across all components, registering a consumer sentiment of 74.6 compared to 71.5 for their younger counterparts. This trend is unusual, the report summary noted, as older individuals typically exhibit more pessimistic views due to factors such as fixed incomes and higher healthcare costs. Such a positive outlook among seniors has been recorded only 23 times since 1985, including during the early months of the COVID-19 pandemic when sentiment among younger people dropped more sharply.

Breaking down the data further, among men, consumer sentiment slightly decreased from 79.6 in April to 79.4 in May, while women’s sentiment fell from 67.9 to 67.5. Individuals under the age of 60 saw their sentiment drop from 75.3 to 71.5, whereas those aged 60 and over experienced an increase from 69.3 to 74.6.

Those earning under $50,000 annually saw a slight increase in sentiment from 67.7 to 68.5, while those earning over $50,000 remained steady at 76.5.

The survey, conducted from April 1 to May 30, included responses from 555 individuals, reflecting a demographic cross-section of Florida. The index used by UF researchers is benchmarked to 1966, with a value of 100 representing the confidence level of that year.


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