GAINESVILLE, Fla. – July consumer confidence among Floridians increased four-tenths of a point to 61.4 from June’s revised figure of 61, a trend that also occurred nationally.
Among the five components that make up the index, two increased, two remained unchanged and one decreased.
Current conditions: Floridians’ opinions about current economic conditions were mixed. Views of personal financial situations now compared with a year ago decreased slightly by five-tenths of a point, from 53.8 to 53.3.
On the other hand, opinions on whether it’s a good time to buy a major household item like an appliance increased 1.5 points, from 51.1 to 52.6. However, those hit hardest by inflation – households making $50,000 or less – were a bit more pessimistic.
Future expectations: While Floridians’ attitudes about 2023 haven’t changed much, they’re a bit more excited about the U.S. economy five years from now.
Expectations of personal finances one year from now stayed at 76.1 month-to-month. Similarly, expectations about U.S. economic conditions over the next year were unchanged at 57.8.
However, the outlook of U.S. economic conditions over the next five years increased 1.1 points from 66.3 to 67.4. though lower-income Floridians with incomes less than $50,000 were, again, a bit more pessimistic.
“Floridians are slightly more optimistic in July, but despite this positive change, confidence remains low at levels that are comparable to those observed during the Great Recession,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
“It is noteworthy that Floridians with an annual income under $50,000 reported more pessimistic views in four of the five components that make up the index. This is not surprising, considering the rising cost of housing, groceries and gasoline, which account for a large portion of their budgets,” he says. “Inflation increased 9.1% from last year in June, the fastest pace since the early 1980s, indicating that soaring prices will remain as one of the major threats to the economy in the coming months.”
Job gains remained strong. According to the Florida Department of Economic Opportunity, Florida’s unemployment rate declined two-tenths of a percentage point to 2.8% in June. Moreover, the state gained 453,600 non-agricultural jobs over the year with all ten major industries experiencing positive gains. Similarly, the U.S. labor market has remained strong.
“However, the strong labor market coupled with elevated inflation will keep the Fed on track to approve further increases in interest rates, raising borrowing costs that are likely to dampen spending, and therefore increasing the risk of a recession,” says Sandoval. “Looking forward, we expect consumer confidence to remain depressed in the months ahead.”
UF’s index 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 (AUGUST 2, 2022)