GAINESVILLE, Fla. – Consumer sentiment among Floridians dropped for a third consecutive month in October to 71.3, down 3.6 points from a revised figure of 74.9 in September. It’s also down 5 points from a pandemic low recorded in April 2020.
All five components that make up the index declined.
Current conditions: Floridians’ opinions about their personal finances now compared with a year ago decreased one point from 71.4 to 70.4. Similarly, opinions as to whether it’s a good time to buy a major household item like an appliance dropped 6.5 points from 69.1 to 62.6. However, certain demographic groups weren’t quite so negative, notably people with annual incomes less than $50,000 and those older than 60.
“Spending intentions have dropped steadily for the past five months,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “This component recorded not only the greatest decrease of any reading this month, but also its largest month-to-month decline since April 2020.”
Sandoval says it might impact Christmas purchases, since Floridians are less optimistic about buying big-ticket items. He calls it a “worrying sign for retailers in the run-up to the holiday shopping season and the economic recovery, since spending is the major driving force behind economic growth.”
Future expectations: The three components on future economic conditions also deteriorated in October. Expectations of personal financial situations a year from now fell 3.6 points, from 89.4 to 85.8 – though people older than 60 were a bit more optimistic.
In looking at U.S. economic conditions over the next year, attitudes fell 5.4 points, from 72.6 to 67.2. In a longer-term look, expectations of U.S. economic conditions over the next five years dropped 1.6 points from 72.0 to 70.4.
“While spending intentions decreased sharply this month, another worrisome trend has emerged regarding future economic conditions,” says Sandoval. “For three consecutive months, outlooks about expected national economic conditions in the short- and long-run have decreased substantially, and they are currently 5.5 and 18.9 points down from April 2020 respectively, reaching their lowest levels in the last eight years.”
Overall, Florida consumer attitudes are in line with the rest of the nation.
“According to the latest release from the Bureau of Economic Analysis, the U.S. economy grew at its slowest pace of the recovery in the third quarter of 2021 as a result of the supply-chain disruptions, higher prices and labor shortages that have characterized the economy in the past months,” Sandoval says. “On the bright side, Florida is soon welcoming back international visitors, which will improve the economic prospects for the tourism industry. Looking ahead, as the issues that have slowed the pace of the recovery are far from resolved, we expect consumer confidence to remain weak in the coming months.”
Conducted September 1 through October 28, the UF study reflects the responses of 249 individuals reached on cellphones and 298 individuals reached through an online panel, a total of 547 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.
SOURCE: Article Written by Kerry Smith (NOVEMBER 3, 2021)