Fla. Consumer Confidence: Feb. Drop Wipes Out Gains
While the vaccine rollout and an unemployment-benefit drop signal better times ahead, it didn’t help much to boost attitudes in Feb., and all components saw a decline.
GAINESVILLE, Fla. – Floridians’ consumer confidence dropped 5.4 points in February to 77.2 from a revised figure of 82.6 in January – a bigger drop than national consumer sentiment in February that declined 2.2 points.
“Consumer sentiment in February is only nine-tenths of a point higher than April’s reading – the lowest level observed last year as a result of the economic damage brought by the pandemic,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “The drop in February wiped out almost all the gains since the index bottomed out in April.
All five components that make up the index decreased.
Current conditions: Floridians’ opinions about their personal finances now compared with a year ago dove 7.4 points from 73 to 65.6 – its lowest level over the past seven years. There was only one exception: People over age 60.
Similarly, opinions as to whether now is a good time to buy a major household item like an appliance decreased 3.4 points from 75.5 to 72.1. The exception: People with an annual income above $50,000 per year.
Floridians across all sociodemographic groups contributed to the drop, except for the groups noted, and UF says the readings were particularly pessimistic among people with income levels under $50,000.
Future expectations: Expectations of personal finances a year from now dropped 7.9 points from 95.3 to 87.4, the steepest decline in the February reading. Floridians across all sociodemographic groups shared that negative expectations, but the drop was greater for people with an annual income above $50,000.
Similarly, expectations about U.S. economic conditions over the next year decreased 2.6 points from 81.6 to 79, and expectations for U.S. economic conditions over the next five years dropped 6 points from 87.6 to 81.6. However, a few subgroups had more positive views for the future U.S. economy, including women, people older than 60, and people with an annual income under $50,000.
“Overall, Floridians are pessimistic in February,” Sandoval says. “The sizable drop in consumer confidence, particularly concerning future economic outlooks, signals uncertainty and a potential decline in discretionary spending in the months ahead which can slowdown the recovery. Nonetheless, new applications for unemployment benefits dropped in February to its lowest level since March last year, suggesting that Florida’s labor market is in better shape. As the vaccination rollout expands in the following months, economic prospects should improve throughout the year.
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