Floridians’ consumer sentiment rose more than a point from last month to 94.7 in February, the seventh straight month of increase, according to a new University of Florida survey.
“Economic optimism among Floridians continues to advance as many of the fundamentals show improvement,” said Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research.
The main driver was positive views of personal finances now compared with a year ago, which rose 7.6 points to 85.1, the highest level since June 2006 when the Florida housing market was at its peak. Among Floridians under age 60, it jumped from 84.2 in January to 92.5 this month, while those age 60 or older ticked up only from 64.1 to 64.7.
Overall expectations of personal finances a year from now declined slightly by 0.4 points to 101.6, rising only among those with annual incomes of $50,000 or more, from 105.6 to 111.0.
Perceptions that now is a good time to buy big-ticket items, such as a car or appliance, rose 2.2 points to 100.8.
Confidence in the U.S. economy over the coming year fell 1.3 points to 94.4, while expectations of U.S. economic conditions over the next five years fell 0.4 points to 91.4.
Some economists share this caution about the future.
“The main concern is wage growth, which has not risen in line with the increase in employment. This is particularly a problem in Florida,” McCarty said.
Florida’s unemployment rate was 5.6 percent in December, the most recent state-level report.
“Low wage growth is a contributing factor to persistently slow inflation, which has led the Federal Reserve to be cautious about raising short-term interest rates,” McCarty said. “Based on recent testimony, the Fed is still on track to raise rates sometime between June and September, but that could change if the recovery stalls.”
Some of those low-wage jobs are in Florida tourism, which has again achieved a record number of visitors and is likely to continue booming because of the harsh winter in the Northeast and idyllic weather in Florida.
Housing prices for existing single-family homes in Florida were up 7.4 percent over the previous year, to $175,000. Housing gains vary considerably across the state: South Florida, particularly Miami, is among the bright spots.
Gas prices, which make up a significant portion of the budget for lower-income households, still remain low at a statewide average in Florida of $2.30 per gallon, although they are up nearly 30 cents from the previous month.
Florida’s favorable economic recovery is reflected in a nearly $1 billion budget surplus heading into the 2015 legislative session.
“While much of the world economy struggles, the U.S. economy seems to be hitting its stride, and Florida is emblematic of that recovery in many ways,” McCarty said.
Conducted Feb. 1-22, the UF study reflects the responses of 445 individuals who were reached on cell phones, representing a demographic crosssection 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.