UF: The Aug. index gauging Floridians’ attitudes fell 4.7 points, thanks in part to COVID-19. Still, it’s less than half the 10.9-point drop in a similar national study.
GAINESVILLE, Fla. – The monthly gauge of consumer attitudes published by the University of Florida (UF) fell in August, likely due to a number of contributing factors, including a resurgence of the COVID-19 virus, inflation and ongoing pressure in the real estate market.
August consumer sentiment among Floridians fell 4.7 points to 78.7 from a revised figure of 83.4 in July, according to UF researchers. However, a nationwide sentiment index fell over twice as much, dropping 10.9 points.
“The decline in consumer confidence comes as no surprise as it remains unclear whether the recent spike in inflation – due to supply chain bottlenecks, pent-up demand and labor shortages – is temporary,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
“Additionally, the latest surge in coronavirus cases and hospitalizations brought on by the delta variant has spooked consumers resulting in event cancellations, hindering consumer spending, and casting a shadow on the economic recovery in the short-run,” he adds.
All five components that make up the complete index declined.
Current outlook: Floridians’ opinions about their personal finances now compared with a year ago decreased 3.9 points from 75.8 to 71.9. Similarly, opinions as to whether this is a good time to buy a big-ticket item, such as refrigerators, cars or furniture, dropped 1 point from 74.8 to 73.8.
Both downward readings were shared by all Floridians, though men were a bit less pessimistic about their current finances.
Future expectations: The three components focused on attitudes about future economic conditions “deteriorated considerably in August,” according to UF’s report, and attitudes about national economic conditions took the biggest hit. Expectations for U.S. economic conditions over the next 12 months plummeted 7.1 points from 85.2 to 78.1.
Expectations of U.S. economic conditions over the next five years took an even bigger hit, plunging 9.3 points, from 87.4 to 78.1.
Floridians weren’t quite so negative about their own economic future. Expectations of personal financial situations a year from now fell a more modest 2 points, from 93.8 to 91.8, though younger Floridians and lower-income households were less pessimistic.
“While the decline in confidence was fueled by growing pessimism in all five components, the main factors behind the downturn were Floridians’ expectations about U.S. economic conditions in the short- and long-run,” says Sandoval. “These expectations signal a potential decline in discretionary spending that could hinder the economic recovery.”
Another point Sandoval raised: The current confidence levels have not yet risen to levels seen before the pandemic hit.
“Consumer confidence is far from the levels observed before the pandemic,” Sandoval says. “The decline in August brought consumer sentiment just 2.4 points above its lowest level since the pandemic started. Looking ahead, we expect consumer sentiment to remain weak in the months ahead.”
Conducted July 1 through August 26, the UF study reflects the responses of 210 individuals who were reached on cellphones and 286 individuals reached through an online panel, a total of 496 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.
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