Contrary to national numbers in July, Fla. sentiment fell 2.1 points as residents worried about the U.S. economy and planned to cut back on spending.
GAINESVILLE, Fla. – July consumer sentiment among Floridians dropped 2.1 points to 66.8, a drop from a revised figure of 68.9 in June, according to the University of Florida’s monthly survey.
The decline moves in the opposite direction of July U.S. consumer sentiment, which surged over seven points higher.
“Despite a resilient labor market in Florida with an unemployment rate holding steady at 2.6% since January and a labor force that surpassed 11 million workers for the first time in June, Floridians are more pessimistic in July,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
“This pessimism stems from Floridians’ spending intentions and their expectations regarding the national economic condition, suggesting that their economic prospects are uncertain,” says Sandoval. “Moreover, these gloomy perceptions are particularly strong among Floridians with an annual income under $50,000.”
Each of five components that make up the index declined in July.
Current economic conditions: Floridians’ opinions of their personal financial situations now compared with a year ago fell slightly, one-tenth of a point, from 59.9 to 59.8.
Similarly, opinions as to whether it’s a good time to buy a major household item like an appliance showed the steepest decline in this month’s reading, down 4.5 points from 62.5 to 58. The last time for that component to drop by more than 4.5 points in one month was in October 2021.
Future economic conditions: Expectations of personal financial situations a year from now fell only slightly, from 82.7 to 81.9.
Outlooks of U.S. economic conditions over the next year dropped 3.1 points from 66.6 to 63.5; and expectations of U.S. economic conditions over the next five years decreased 2.1 points from 72.9 to 70.8.
“Inflation has declined steadily since peaking at 9.1% last summer, reaching 3% in June” says Sandoval. “This decline is positive news and increases the likelihood that the Fed will slow or even cease to raise interest rates soon. In turn, this increases the chances of avoiding a recession. The Fed’s current tightening cycle has already driven interest rates to a 22-year high in July.”
While inflation is down nationally, Sandoval notes that some parts of Florida continue to see relatively high inflation. “According to the latest figures from the Bureau of Labor Statistics, inflation in South Florida was 6.9% in June, and in the Tampa Bay area, it was 7.3% in May. While elevated inflation typically leads to reduced discretionary spending and a shift in consumption patterns as families prioritize essential items, persistent price rises could also lead to increased uncertainty.”
However, Sandoval is somewhat optimistic about the future for Florida, saying he predicts “gradual improvements in consumer sentiment in the months ahead, as long as inflation moderates in Florida.”
The UF study reflects the responses of 193 individuals who were reached on cellphones and 310 individuals reached through an online panel, a total of 503 individuals, representing a demographic cross section of Florida.
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