Fla. Residents Less Confident, Wary of U.S. Economy
Consumer sentiment dropped for the second month in a row, though attitudes about personal situations rose – both current outlooks and expectations for next year.
GAINESVILLE, Fla. – Floridians’ economic attitudes dropped again in September, the second month in a row for declines.
The monthly index released by the University of Florida’s (UF) Bureau of Economic and Business Research hit 76.1 in September, down 2.4 points from a revised figure of 78.5 in August to hit its lowest level in almost 8 years (October 2013, at 69.9 points).
“The decline in consumer confidence was largely fueled by growing pessimism in Floridians’ expectations about national economic conditions in the short- and long-run,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “In the last two months, these two components have accumulated substantial losses indicating that Floridians foresee a slower than anticipated economic recovery.”
Among the five components that make up the index, two increased and three 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 increased 1.1 points from 71.6 to 72.7. On the other hand, opinions as to whether now is a good time to buy a major household item like an appliance dropped 2.3 points from 72.9 to 70.6.
Although these two components moved in opposite directions, opinions were split across demographic groups.
Future expectations: Floridians’ opinions about future economic conditions were also mixed in September. Expectations of personal finances a year from now increased slightly, rising from 90.8 to 91.1.
Expectations about U.S. economic conditions over the next year, however, dropped 5 points, from 78.6 to 73.6, while the outlook of U.S. economic conditions over the next five years tumbled 5.7 points from 78.5 to 72.8 – the largest decrease of any reading this month.
“Notably, while responses to the different components of the index were split by socio-demographic groups, men consistently reported less favorable views across all five questions of the index,” Sandoval says.
“The drop in consumer confidence is consistent with the current economic outlook,” says Sandoval. He says the economic recovery slowed after supply-chain bottlenecks started to drive up prices. In addition, the “delta variant dented consumer demand for some services and stalled the long-anticipated increase in business travel,” which he calls one of the largest sources of revenue for the hotel industry.”
He says the consumer confidence decline doesn’t forecast an economic downturn. However, “the loss of confidence could prolong the recovery of the jobs lost during the pandemic. Nonetheless, as the snowbird season approaches and COVID-19 travel restrictions are lifted, we anticipate a boost to Florida’s economy and consumer confidence in the coming months.”
Conducted Aug. 1 through Sept. 23, the UF study reflects the responses of 203 individuals who were reached on cellphones and 274 individuals reached through an online panel, a total of 477 individuals, representing a demographic cross section of Florida. The 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.
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