Although UF’s monthly consumer confidence survey ended the year on a high note, the survey marked its third lowest level since it began in 1985.
GAINESVILLE, Fla. – Consumer sentiment in Florida inched up for a third consecutive month in December to 69.5, gaining 1.2 points from a revised figure of 68.3 in November. Meanwhile, national consumer sentiment surged by 8.4 points, the University of Florida found in its monthly consumer confidence survey.
The annual average consumer confidence ended 2023 at 67.9 points for the year, marking the third-lowest level on record since the series began tracking consumer confidence in 1985, UF researchers said. The lowest on record was 64.3 in 2022 and the second lowest was 65.6 points in 2008, said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
The survey looks at five components that make up the index. December’s survey showed an increase in three of the components and a decrease in two:
- Personal financial situation now compared to a year ago:
Views of personal financial situations compared with a year ago decreased slightly by seven-tenths of a point, moving from 57.3 to 56.6. These views were divided among sociodemographic groups, with men, people age 60 and older, and people with an annual income under $50,000 expressing more favorable opinions.
- Personal financial situation expected one year from now:
Expectations of personal finances a year from now showed the steepest decline in this month’s reading, tumbling 4.1 points from 85.7 to 81.6. The views were shared by all Floridians but were particularly strong among women and people 60 and older.
- Expected national economic conditions over the next year:
Expectations about U.S. economic conditions over the next year surged 5.6 points, rising from 66 to 71.6.
- Expected national economic conditions over the next 5 years:
Expectations about U.S. economic conditions over the next five years rose 3.1 points, moving from 73.4 to 76.5. The optimistic outlook about the country’s economy were shared by all Floridians except women.
- Is this a good time to buy major household items?
Opinions on whether now is a good time to purchase major household items, such as appliances, increased by 1.9 points, rising from 59.1 to 61. The views were divided, with people younger than 60 and people with an annual income above $50,000 expressing less favorable opinions.
The survey noted that national and state economic indicators remain favorable as we enter 2024:
- Inflation, including core inflation, has steadily declined
- Unemployment remains low
- Interest rates are decreasing
“The current economic outlook has led the Fed to hold off on increasing interest rates, with expectations of rate cuts next year. This scenario, characterized by low unemployment, moderated job gains, and easing inflation, aligns with what is referred to as a ‘soft landing,’ where inflation cools without triggering a recession. Importantly, the current economic outlook indicates that 2023 is concluding without a recession,” Sandoval said.
“Looking ahead, given the economic outlook, we expect gradual improvements in consumer sentiment among Floridians in the months ahead,” said Sandoval.
The UF study, conducted Nov. 1 through Dec. 22, reflects the responses of 332 individuals who were reached on cellphones and 260 individuals reached through an online panel, a total of 592 individuals, 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.
© 2024 Florida Realtors®