Floridians’ consumer sentiment declined one point in April to 79, according to a new University of Florida survey.
“As we expected, the overall consumer sentiment index is remaining relatively flat given the lack of significant economic news,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “Here in Florida, the economy remains on a steady path without any big changes either negative or positive.”
Three of the five components making up the index decreased, and two increased.
Respondents’ overall opinion that they are financially more secure than a year ago fell three points to 69 from a post-recession high in March. Their expectations of improved personal finances a year from now also fell, dropping six points to 77. Confidence in U.S. economic conditions over the next year dropped five points to 77, but expectations that the nation’s economy will do better over the next five years rose five points to 82. Finally, the component measuring whether the present is a good time to buy a big-ticket item, such as a car, increased three points to 89.
Florida’s unruffled consumer sentiment, however, is five points lower than the national level of 84. Concern over employment may help explain why. Last month Florida’s unemployment rate ticked up one-tenth of a percent to 6.3 percent. This, however, may not be bad news, McCarty said.
“A typical pattern after most recessions is for unemployment to temporarily increase, as previously discouraged workers see more job availability and reenter the labor force,” McCarty said. “There is no doubt that Florida lost workers from the labor force. The question is whether they permanently left to take early retirement, or whether they temporarily left for job training or are just biding time until the labor market improves.”
Florida’s labor force also got bigger. “While it is too early to tell, this increase could signal improvements ahead in Florida’s job market, at least for those workers having a job even if the wages for those jobs are lower than they were prior to the recession,” McCarty said.
Housing continued to improve in March with the median price for a single-family home rising to $173,000, a level not achieved since last August. “However, a recent report on national new home sales for March was surprisingly down 14.5 percent, indicating there may be a slowdown in housing this year compared to last year,” McCarty said.
Floridians can expect consumer confidence to remain in the upper 70s to low 80s, given the dearth of significant economic news, McCarty said. However, international developments, such as the conflict between Ukraine and Russia, and a continuing decline in the growth of the Chinese economy could darken consumers’ mood.
Conducted April 1-24, the UF study reflects the responses of 402 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.