Fla. Consumers’ Attitudes Stable in May After Big March Decline
GAINESVILLE, Fla. – After two months of historic declines, consumer confidence among Floridians inched up one-tenth of a point in May to 76.4 from April’s revised figure of 76.3. National consumer sentiment showed a similar increase.
Among the five components that make up the index, two increased and three decreased.
Current conditions: Floridians’ opinions about today’s economic conditions were mixed. On the one hand, perceptions of one’s personal financial situation now compared with a year ago decreased 3.1 points from 72.4 to 69.3. Opinions were split by socio-demographic groups, however: Men and Floridians with an annual income above $50,000 expressed less favorable views, while women and those with incomes under $50,000 reported favorable views.
On the other hand, opinions on whether now is a good time to buy a major household item like an appliance surged 9.3 points from 48.1 to 57.4 after hitting an all-time low one month earlier. Female Floridians shared this favorable view, while men showed a slightly more pessimistic opinion.
Future expectations: Outlooks about economic conditions one year from now were also mixed. Expectations of personal finances a year from now increased slightly three-tenths of a point from 99.0 to 99.3, but expectations for U.S. economic conditions over the next year decreased seven-tenths of a point from 72.7 to 72.0.
Expectations of U.S. economic conditions over the next five years declined 5.2 points from 89.3 to 84.1.
“May’s slightly positive change in consumer confidence is driven by Floridians’ responses to whether now is a good time to buy a big-ticket item,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “Overall, the optimistic change in consumers’ responses to whether now is a good time to buy a major item is a good sign for the economy, as it indicates that consumers are willing to increase their spending. Nonetheless, views about national economic conditions in May were overall less favorable, particularly regarding long-term economic conditions. These pessimistic views were notably stronger among Floridians with incomes under $50,000, whose job prospects have been severely affected by the pandemic.”
Consumer spending is an important driving force behind economic growth. According to the Bureau of Economic Analysis, at the national level, consumption expenditure dropped 13.2% in April. While expenditure in services declined 12%, expenditure in durable and nondurable goods declined 15%.
“Consumer confidence seems to have leveled-off after the unprecedented declines observed in the past two consecutive months as a result of the economic-induced coma in response to the COVID-19 outbreak,” says Sandoval. “As consumer spending increases and economic activity restarts in Florida, we expect consumer confidence to increase in the following months. However, it is important to keep in mind that the latent threat of a potential second wave of coronavirus will also affect consumer confidence.”
Conducted May 1-28, the UF study reflects the responses of 383 individuals who were reached on cellphones, 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.
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