Fla. Consumer Confidence Drops 3.5 Points in Nov.
UF economist: Most pessimism stems from negative views of current personal financial situations – plus most Floridians expect only a slow U.S. recovery.
GAINESVILLE, Fla. – November consumer sentiment in Florida dipped for the second consecutive month in November, falling to 80.9 – a 3.5-point drop from a revised figure of 84.4 in October. It is, however, still less of a decrease than a similar national survey, where American sentiment dropped 4.9 points.
Among the five components that make up Florida’s index, one increased and four decreased.
Current conditions: Floridians’ opinions about current economic conditions were mixed. On the one hand, perceptions of personal financial situations now compared with a year ago improved, increasing 1.9 points from 67 to 68.9. On the other hand, opinions as to whether it’s a good time to buy a big-ticket item, such as a refrigerator or furniture, dropped slightly from 77.5 to 76.8.
Although these two components moved in opposite directions, opinions were consistently split across socio-demographic groups. Women and people with an annual income above $50,000 reported less-favorable views, while men and those with income under $50,000 reported more-favorable opinions.
Future expectations: The three components focused on Floridians’ expectations for the future economy “deteriorated considerably in November,” according to the report.
Expectations of personal finances a year from now plummeted 7.2 points from 98.1 to 90.9. And expectations about U.S. economic conditions over the next year dropped 4.2 points from 87.1 to 82.9.
Asked about the U.S. economy five years from now, Floridians were just as pessimistic. That index dropped 7.2 points from 92 to 84.8.
Most Floridians tended to share a negative view of the future, with one exception: People with an annual income under $50,000 had a more upbeat outlook for their personal economic situation one year from now and for the national economy one year from now.
“While responses to the different components of the index were split by socio-demographic groups, women and those with an annual income over $50,000 consistently reported less favorable views across all five questions of the index,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
Sandoval says the negativity increased “despite the positive news about the efficacy of several coronavirus vaccine frontrunners bringing hope that economic activity can bounce back next year.” In fact, “most of the pessimism comes specifically from Floridians’ opinions about their personal financial situation now compared with a year from now and from opinions about the national economic outlook in the long-run, signaling that Floridians expect a slow recovery.”
According to Sandoval, a big reason behind the drop is “the outcome of the presidential election.”
Contrary to the drop in consumer confidence, the number of Florida’s weekly claims for unemployment benefits has been trending down in the last weeks, and it reached a new pandemic low in November. Similarly, the unemployment rate dropped seven-tenths of a percentage point from 7.2% in September to 6.5% in October.
“Looking ahead, as the cases of coronavirus increase and restrictions are reimposed across the country limiting social and economic activity, we can expect continued low levels of consumer confidence in the following months,” Sandoval says.
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