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Fla. Consumers Unimpressed with Resilient Economy

UF’s Oct. consumer sentiment survey found a drop in Floridians’ attitudes about the economy, but only a bit – and notably less than the companion national survey.

GAINESVILLE, Fla. – Consumer sentiment in Florida inched down for a second consecutive month in October to 66.2, but it’s only one-tenth of a point lower compared to September’s revised figure of 66.3, according to the University of Florida’s (UF) monthly survey.

National consumer sentiment, however, saw a drop of 4.1 points.

“Inflation has fallen over the past year, the labor market has shown surprising resilience, and continued economic growth has consistently outperformed expectations,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “In fact, the U.S. economy grew at an annual rate of 4.9% in the third quarter of 2023, driven by increased consumer spending and inventory investment.”

But Floridians’ consumer sentiment remains “persistently low, making 2023 poised to be the third- lowest year in terms of consumer sentiment since records have been available.”

Among the index’s five components, two increased, two decreased and one was unchanged.

Current conditions

Floridians had generally pessimistic opinions about current economic conditions in October. Views of personal financial situations now compared with a year ago decreased 2.3 points, dropping from 56 to 53.7.

In contrast, opinions on whether it’s a good time to purchase a major household item, such as an appliance, remained unchanged at 56.2.”

Future expectations

Floridians had mixed feelings about the short-term future: The three components were mixed in October.

Expectations of personal finances a year from now showed the greatest increase, rising 3.6 points from 80 to 83.6. And Sandoval says that, remarkably, all demographic groups in Florida shared those positive expectations.

Conversely, expectations about U.S. economic conditions over the next year decreased 2.7 points from 67.2 to 64. – but expectations about U.S. economic conditions over the next five years increased by one point from 72.1 to 73.1.

“Pessimism among Floridians regarding their current financial situation compared with a year ago and their expectations about the national economy over the next year indicates that they may be more cautious in their spending habits in the months ahead,” Sandoval says. “However, the continued resilience in the labor market and consumer spending provides a positive signal for retailers as they approach the holiday shopping season.”

While the inflation fight stalled in September at 3.7%, inflation has fallen sharply over the past year., and the labor market has remained robust, especially in Florida, where the unemployment rate stood at 2.8% in September – 14th among all other states.

“Looking ahead, as overall consumer sentiment has remained low throughout the year without gaining any significant ground, we anticipate that sentiment will likely continue to stay depressed for the rest of the year,” Sandoval predicts.

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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