July Fla. Consumer Confidence Down a Bit as Virus Expands
TALLAHASSEE, Fla. – After two months of modest increases, Florida consumer sentiment dropped 2 points in July to 80.5 from a revised figure of 82.5 in June. However, Floridians’ attitudes held steadier than the national as a whole: National consumer sentiment fell 5.6 points.
“The decline in July comes as no surprise as the record number of cases and deaths attributed to the coronavirus in Florida have reduced consumer activity and slowed the pace of the economic recovery,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
Among the five components that make up the index, one increased and four decreased.
Current outlook: Floridians’ opinions about current economic conditions were mixed. Views of personal financial situations now compared with a year ago increased 2.6 points from 70.8 to 73.4, but those views are divided across sociodemographic groups. Women, people 60 and older, and people with annual incomes under $50,000 expressed less favorable views, while men, people younger than 60, and people with annual incomes of $50,000 or more expressed favorable views.
In contrast, opinions as to whether this is a good time to buy a big-ticket household item, such as an appliance, decreased 1.8 points from 76.3 to 74.5. The downward trends were largely shared by all Floridians with the exception of those age 60 and older, whose reading showed a positive change.
Future expectations: The three components corresponding to Floridians’ expectations about economic conditions a year from now also largely declined in July. Expectations of personal finances 12 months from now fell less than a point, from 95.5 to 94.9. However, these opinions are divided as well with women, those younger than 60 and those with income under $50,000 reporting less-favorable views.
Expectations about overall U.S. economic conditions over the next year dropped 4.6 points, to 74.7 from June’s 79.3 to 74.7. The outlook for U.S. economic conditions over the next five years decreased 5.4 points, from 90.6 to 85.2. The latter two downward readings were shared by all Floridians.
“While responses to each component of the index were split by demographic groups, women and those with income under $50,000 consistently reported less favorable views across all five questions of the index,” Sandoval says.
Sandoval thinks most of the pessimism in July’s index occurred because Floridians think an economic recovery will take longer than they once did.
“Most of the pessimism comes from the overall expectations about the outlook of U.S. economic conditions in the short- and long-run,” he says. “With an economy largely depending on tourism and a lack of steady flow of tourists, the labor market is poised for a long recovery.”
Unemployment remains a big unknown that will impact a recovery.
“Since mid-March, the state has processed over three-million jobless claims,” Sandoval says. “Currently, an important share of the labor force is receiving unemployment benefits and new applications for benefits have continued to pile up in July. Over the last weeks, it has been unclear whether additional payments from the federal program are coming, thus further increasing the uncertainty and pessimism among Floridians.
Sandoval predicts additional future declines “as Floridians must cope with both the pandemic and the hurricane season, which can further delay the recovery efforts.”
© 2020 Florida Realtors®