Consumer sentiment continues downward trend in October

For the third consecutive month, Florida’s consumer sentiment is down, according to the monthly study from the University of Florida Bureau of Economic and Business Research.

October saw a drop of 1.5 points to a composite score of 94.3, continuing a downward trend that began in August. Among the five components of the index, one increased and four decreased.

In the past month, the perception of one’s personal finance dropped 1.4 points compared to a year ago. Respondents’ opinions as to whether now is a good time to buy a major household item also declined, totaling a 1.2 point drop.

The University of Florida says those measurements are two components that reflect Floridians’ views about current economic conditions.

Three more components are used to gauge consumer sentiment. Together, the university says these elements represent expectations about future economic conditions.

One of the components, expectations of personal finances a year from now, saw an increase of 2.5 points — the only metric to not decrease in October.

Meanwhile, anticipated U.S. economic conditions over the next year dropped 3.2 points and expectations over the next five years fell 4.2 points — the most significant drop in the past month.

Hector Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research, says this consumer “pessimism” comes from negative expectations of the U.S. economy in the short and long-term. It is mainly prevalent in people with incomes higher than $50,000 and those 60 years old and older.

There is some good news, however. The university says Florida’s economy keeps growing and is approaching full employment, and expects labor markets will tighten from a surplus of jobs, leading to an overall boost for Floridians. 

“The strengthening of the labor market will result in higher wages, which will become the main driver behind income growth for Floridians,” Sandoval said. 

The university said that, even with Hurricane Irma, September saw the lowest Florida unemployment rate since April 2007.

Sandoval says there also is good news for retailers in Florida as the holiday season approaches. Consumer’s perception of whether it is a good time to buy a major household item increased more than 10 points to 102.5.

The university cited that the National Retail Federation has forecast that holiday retail sales in November and December will increase between 3.6 and 4 percent from last year.

The study used a cross section demographic of 532 individuals in Florida. The lowest index possible is for the study is a 2, the highest is 150.