After three monthly increases, UF’s sentiment index fell one point, due mainly to “somewhat unexpected” concerns about the nation’s long-term economic health.
GAINESVILLE, Fla. – After three consecutive monthly increases, consumer sentiment among Floridians dropped one point in April to 68.7 from a revised figure of 69.7 in March. However, national consumer sentiment increased 1.5 points.
“Despite challenges such as elevated inflation, hikes in interest rates and turmoil in the banking sector, consumer sentiment remained resilient in the first quarter of 2023,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “However, in April, Floridians’ expectations about the national economy took a downturn, resulting in the first drop in consumer confidence for the year.”
Among the five components that make up the index, two increased and three decreased.
Current conditions: Floridians had a positive outlook about current economic conditions in April. Views of personal financial situations now compared with a year ago increased 1.8 points from 60.7 to 62.5 – and opinions as to whether it’s good time to buy a big-ticket household item such as a refrigerator or furniture increased 1.8 points from 57.6 to 59.4.
Future expectations: In contrast, however, views about future economic conditions deteriorated among Floridians.
Expectations for personal financial situations a year from now decreased slightly, going from 83.8 to 83.6.
Outlooks of U.S. economic conditions over the next year dropped 3.3 points, from 69.7 to 66.4, and it doesn’t get more positive over a longer timeline. Expectations of U.S. economic conditions over the next five years showed the steepest decline, dropping 5.2 points from 76.7 to 71.5.
“The negative expectations regarding U.S. economic conditions are somewhat unexpected, given the overall economic expansion in the U.S. during the first quarter of 2023 and the favorable economic indicators in Florida,” says Sandoval. “In particular, Florida’s labor market has remained strong, with an unemployment rate holding steady at 2.6% for the past three months.”
Regardless of the reason for the decline, though, Sandoval says a continued drop “could spell trouble for the economy. This would suggest that Floridians are likely to reduce their spending, particularly discretionary spending, which could lead to decreased demand for goods and services and contribute to an economic slowdown.”
He calls next month’s consumer sentiment report “crucial in assessing Florida’s economic prospects.”
© 2023 Florida Realtors®
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