By Oriana Diaz | UF News
Consumer sentiment among Floridians declined for the third consecutive month in May, dropping 1.4 points to 72.7 from a revised 74.1 in April. National consumer sentiment similarly declined.
“The decline in consumer sentiment comes as little surprise given that inflation accelerated during the month, eroding purchasing power and placing renewed pressure on household budgets. It is also worth noting that April’s figure was revised downward from 74.6 to 74.1, capturing the additional inflationary pressures in energy markets toward the end of the month. While labor market conditions nationwide remained relatively resilient, Florida’s labor market softened further, with the unemployment rate rising to 4.8% in April and continuing to diverge from the national rate. Taken together, these developments help explain why consumer sentiment remained subdued in May,” said Hector H. Sandoval, director of the Economic Analysis Program at University of Florida’sBureau of Economic and Business Research.
Among the five components that make up the index, one increased and four decreased.Floridians’ views of current economic conditions weakened in May.
Views of personal financial situations compared with a year ago experienced the steepest decline, falling 3 points from 69.7 to 66.7. Opinions about whether now is a good time to purchase a major household item, such as an appliance or furniture, decreased slightly by 0.4 point, from 62.7 to 62.3.
These views varied across sociodemographic groups. For current financial situations, women and people with an annual income under $50,000 reported more favorable assessments. For spending intentions, these groups also expressed more favorable views, joined by people aged 60 and older and people with an annual income over $50,000.Floridians’ expectations about future economic conditions were mixed in May, with weaker expectations over the next year but a more stable long-term outlook.
Expectations of personal financial situations a year from now fell 2.3 points from 87.4 to 85.1. Similarly, expectations regarding U.S. economic conditions over the next year declined 1.2 points from 73.8 to 72.6.
These views varied across sociodemographic groups. Women and people with an annual income under $50,000 expressed relatively more favorable views across both components, while people aged 60 and older reported more positive expectations regarding their personal finances and people younger than 60 expressed more favorable views of the short-run national outlook.
In contrast, expectations regarding U.S. economic conditions over the next five years increased slightly, rising 0.1 point from 76.8 to 76.9. However, these views were split by demographic groups, with men and people younger than 60 reporting less favorable expectations.
“Consumer sentiment in Florida has been trending downward over the past three months, reflecting growing pessimism about future economic conditions and spending intentions. This decline in consumer confidence could slow Florida’s economic growth, as a pullback in discretionary spending may dampen economic activity in the months ahead,” Sandoval said.
“While the near-term outlook remains uncertain, inflationary pressures, particularly those stemming from volatile energy markets, remain an important source of risk. If higher energy costs continue to pass through to transportation, production, and other business inputs, inflation could remain elevated for longer than anticipated. Such a scenario may make the Fed less inclined to lower interest rates, keeping borrowing costs elevated for households and businesses. Together, these factors could continue to weigh on consumer confidence as the year progresses,” Sandoval added.
Conducted from April 1 through May 28, the UF study reflects the responses of 326 individuals who were reached on cellphones representing a demographic cross section of Florida.
Data were weighted based on Florida county of residence, age group, and sex to ensure representativeness of the Florida population.
The population figures used for weighting or targets, were obtained from the Population Program of the Bureau of Economic and Business Research (BEBR), which produces the official population estimates for the state of Florida.
Phone data quality is maintained by monitoring and reviewing interviews and preventing duplicate records.
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 2, and the highest is 150.
Details of this month’s survey can be found atbebr.ufl.edu/florida-consumer-sentiment/.