UF report: Consumer sentiment continues lukewarm trend in September

Sunshine State consumers are bullish on the economy.

Floridians were lukewarm on the economy last month and their opinion didn’t improve much in October, according to new data from the University of Florida (UF).

The latest consumer sentiment measure clocks in at 66.2, a one-tenth of a point drop compared to September despite generally positive economic indicators. Nationally, consumer sentiment fell 4.1 points month-over-month.

“Inflation has fallen over the past year, the labor market has shown surprising resilience, and continued economic growth has consistently outperformed expectations. 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,” said Hector H. Sandoval, Director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

“Yet, consumer sentiment among Floridians has remained persistently low, making 2023 poised to be the third-lowest year in terms of consumer sentiment since records have been available.”

The topline consumer sentiment figure is made up of five components, two based on current perceptions of the economy and three based on future economic expectations.

According to UF, current conditions are driving Floridians’ pessimism. Views of personal financial situations now compared with a year ago fell from 56 to 53.7. These sentiments were shared by Floridians across all sociodemographic groups, except for people who make $50,000 a year or more. Opinions on whether now is a good time to purchase a major household item, such an appliance, were flat at 56.2.

“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. However, the continued resilience in the labor market and consumer spending provides a positive signal for retailers as they approach the holiday shopping season,” Sandoval said

Future expectations were a mixed bag. More Floridians say they’re optimistic about their personal finances a year from now — that column ticked up 3.6 points to 83.6, and the upward trajectory cut across all demographics which the UF memo described as “remarkable.”

Floridians weren’t as bullish on the U.S. economy in the near term, however, with the one-year outlook falling from 67.2 to 64.5. Still, the five-year outlook rose by a point to 73.1.

The dip in the one-year outlook was shared by all Floridians except those who make more than $50,000 a year. The five-year optimism carried across all demographics except those over 60, who reported slightly more pessimistic views.

The UF report noted that while inflation didn’t continue to fall last month, the annual rate of 3.7% is far lower than a year ago. Other positives: Florida boasts a 2.8% unemployment rate — No. 14 among all states — and labor force participation stands at 59.8%, a 0.7-point increase since January.

“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 said.

The UF survey was conducted Sept. 1 through Oct. 29. It collected responses from 224 Floridians via cellphone and 301 Floridians who participated in an online panel, a total of 525 individuals. 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.