October 4, 2022

Florida's consumer sentiment rises in March despite large national slump

Consumer sentiment among Floridians ticked up 1.7 points in March to 69.7 from a revised figure of 68 in February — unlike the national consumer sentiment index, which reached a new decade low.

Among the five components that make up the index, four increased and one decreased.

Floridians’ opinions about current economic conditions were mixed. On one hand, perceptions of personal financial situations now compared with a year ago decreased slightly seven-tenths of a point from 63.5 to 62.8. However, opinions varied by demographics with men, people older than 60, and people with an annual income under $50,000 reporting more-favorable opinions. In contrast, opinions as to whether now is a good time to buy a big-ticket item, such as refrigerators, cars, or furniture increased 3.8 points from 53.6 to 57.4, the greatest increase of any reading this month. These positive views were shared by all Floridians and are stronger among men, people younger than 60, and people with an annual income of $50,000 or more.

Future economic expectations portrayed an improved outlook in March. Expectations of personal finances a year from now increased 2.6 points from 81 to 83.6. Similarly, the one-year outlook of U.S. economic conditions increased 2.1 points from 68.3 to 70.4, while expectations of U.S. economic conditions over the next five years increased 1 point from 73.6 to 74.6. Notably, these optimistic expectations were shared by all Floridians with the exception of people with an annual income above $50,000 who reported pessimist expectations regarding the nation’s economic outlook over the next five years.

“The increase in consumer confidence in March was primarily due to improvements in Floridians' spending intentions and expectations of personal finances a year from now. Interestingly, these expectations contrast with the current inflation outlook which threatens to strain household budgets as the price of goods and services continues to rise,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

Fueled by a sharp increase in gasoline prices, the annual rate of inflation reached 7.9% in February, another four-decade high. “With the summer travel season rapidly approaching, the prospect of higher gas prices at the pump may influence travel plans and cause some people to reduce their driving, a worrying development for Florida's tourism industry,” Sandoval added.

On the bright side, Florida's labor market has remained robust, with strong demand for workers across all major industries. According to the latest Florida jobs report, the unemployment rate in February fell to 3.3%, down 0.2% from January. In line with these trends, the number of workers filing for unemployment benefits in Florida has remained at record low levels in recent weeks.

“Russia’s invasion of Ukraine added new economic uncertainty and fresh disruptions to the global economy, which is still recovering from the COVID-19 pandemic. Although it is unclear whether the crisis in Ukraine will have any direct impact on Florida's economy, aside from raising energy prices, we expect consumer sentiment to remain weak in the coming months,” Sandoval said.

Conducted February 1 through March 24, the UF study reflects the responses of 189 individuals who were reached on cellphones and 280 individuals reached through an online panel, a total of 469 individuals, 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 https://www.bebr.ufl.edu/florida-consumer-sentiment/.

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