Consumer sentiment among Floridians rose 2.1 points in June to 96.4, changing course after two months of decline.
Among the five components that make up the index, four increased and one decreased.
Survey respondents’ perceptions of their personal financial situation now compared with a year ago showed the greatest increase, up 6.4 points from 85.5 to 91.9. “Importantly, all Floridians share these perceptions, independent of their age, gender or income,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
Opinions as to whether now is a good time to buy a big-ticket household item such as an appliance increased 1.7 points to 102, although readings vary across demographic groups. “In particular, positive perceptions are seen among women, those under age 60 and those with an annual income of $50,000 and over, while they are negative among men, seniors and those with income under $50,000,” Sandoval said.
Expectations of personal finances a year from now rose 3.5 points to 104.8. “Overall, Floridians appear to be more optimistic. Most of the increase is due to the positive perceptions of consumers’ current and future personal finance situation,” Sandoval said.
Views on the future of the U.S. economy were mixed: Expectations of U.S. economic conditions over the upcoming year dropped 1.8 points to 91.8; however, anticipation of U.S. economic conditions over the next five years ticked up eight-tenths of a point from 90.8 to 91.6.
The labor market in Florida has continued to strengthen, adding jobs on a monthly basis. Since the beginning of 2017, the unemployment rate has declined steadily. The Florida unemployment rate in May was 4.3 percent, down two-tenths of a percentage point from April. As of May, the number of jobs added statewide over the last year came to 228,000, a 2.7 percent increase that outpaces the nation’s job growth rate of 1.6 percent.
The positive outlook of Floridians may also be fueled by cheaper prices at the gas pump, the lowest in over a decade going into the Fourth of July travel season. Having a few extra dollars left over after each fill-up may contribute to feelings of financial well-being.
Nationwide, economic activity has increased and inflation has declined on a 12-month basis. As a result, last month the Federal Reserve decided to raise the federal funds target range to between 1 percent and 1.25 percent.
“This change will eventually be transmitted to other interest rates, including car loans, credit cards and mortgages,” Sandoval said. “The evolution of consumer perceptions as to whether it is a good time to buy a big household item in the following months will be an important indicator in assessing how the increased interest rates affect consumption.”
Conducted June 1-28, the UF study reflects the responses of 479 individuals who were reached on cellphones, representing a demographic cross section of Florida.
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.
Details of this month’s survey can be found at http://www.bebr.ufl.edu/csi-data.