The recent hurricanes to strike Florida and the U.S. in recent weeks appear to have shaken the confidence that Floridians have in the economy–at least in the short-term.
The latest numbers released by the University of Florida’s consumer sentiment index shows a drop of six-tenths of one percent in consumers confidence in the economy, fueled mainly by a drop in short-term confidence among Floridians.
The index fell from 96.1 in August to 95.5 for September.
The director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research, Hector H. Sandoval, says the decrease appears to be the result of the short-term effects of hurricanes Harvey and Irma.
“Most of the pessimism in September stems from negative expectations regarding the personal financial situation of Floridians in the short-run. These expectations reflect in part the current and expected effects of the hurricane season on the state,” Sandoval said.
Of the five categories used in compiling the index, three of them decreased and two increased.
Consumers’ expectations of their personal finances a year from now showed the biggest drop, falling 4.4 points from 104.8 to 100.4. It was followed by a 2.6 point drop, from 95.8 to 93.2, in people’s expectations of U.S. economic conditions over the next year. People’s perceptions of their personal financial situation now compared with a year ago decreased from 87.8 to 87.2
The largest increase in consumers’ sentiment came in expectations of U.S. economic conditions over the next five years. That figure increased 3.7 points from 89.6 to 93.3. Meanwhile, people’s opinions as to whether now is a good time to buy a big-ticket household item such as an appliance rose from 102.6 to 103.2.
Hurricane Harvey devastated Texas in late August resulting in higher prices at the gas pumps. Harvey was followed by Irma in September, which tore through much of Florida disrupting the state’s economy.
Sandoval says any concerns that consumers may have in the economy appear to be short term and expects the confidence to rebound.
“Nonetheless, as the state continues to recover, these trends will likely reverse as rebuilding efforts take place. Hurricane Irma should not erase the positive labor market conditions that have prevailed in the state for the past few years,” Sandoval said.