December consumer sentiment breaks downward trend, rises in spite of shutdown

After four months of consecutive declines, consumer sentiment among Floridians rose to 98.1 in December, up 3.1 points from November’s revised figure of 95. Similarly, consumer sentiment at the national level increased in December.

“Although December’s figure is slightly below 2018’s average of 98.4, consumer confidence has remained high throughout the year,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

The five components that make up the index increased.

Floridians’ opinions of their personal financial situations now compared with a year ago increased 3.1 points from 85.1 to 88.2. Attitudes toward whether now is a good time to buy a major household item like an appliance showed the biggest increase in this month’s reading from 105.4 to 109.7, increasing 4.3 points.

Opinions regarding future economic conditions also increased this month. Respondents’ expectations of their personal financial situations a year from now showed the second biggest increase from 102.4 to 105.8, increasing 3.4 points. Anticipation of U.S. economic conditions over the next year rose 1.9 points, from 91.9 to 93.8, and anticipation of U.S. economic conditions over the next five years rose 2.6 points from 90.2 to 92.8.

“Overall, Floridians are more optimistic this month. Looking ahead to 2019, the gains in consumers’ future expectations about the economy are very positive signs,” Sandoval said.

As 2018 ends, economic indicators in Florida have remained favorable and the prospects for 2019 are good. Particularly, the labor market in Florida continued to strengthen in the final months. The unemployment rate was 3.3 percent in November, down one-tenth of a percentage point from October’s rate, and down six-tenths of a percentage point from November 2017’s rate. Furthermore, November’s unemployment rate is the lowest since July 2006, and it is two-tenths of a percentage point higher than the lowest level observed since the state data series began in 1976. In November, 241,600 jobs were added statewide compared with a year ago. Among all industries, leisure and hospitality gained the most jobs, followed by education and health services, and professional and business services.

According to the Bureau of Economic Analysis, Florida’s gross state domestic product increased 4.5 percentage points in the second quarter of 2018. In particular, real estate and rental leasing, professional, scientific and technical services, and information were the leading contributors to economic growth in Florida.

“Despite the recent volatility in the stock market and the partial government shutdown, the year is ending with an overall positive economic outlook and high level of consumer confidence among Floridians. Looking forward, we expect consumer sentiment in January to remain around the observed average of 2018,” Sandoval said.

Conducted Dec. 1-28, the UF study reflects the responses of 419 individuals who were reached on cellphones, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.

Details of this month’s survey can be found at http://www.bebr.ufl.edu/csi-data