UF: Consumer confidence in Fla. dropped 1.4 points in May, because a small uptick in current attitudes wasn’t enough to counter a slight downturn in future expectations.
GAINESVILLE, Fla. – After two months of consecutive increases, May consumer sentiment among Floridians dropped 1.4 points to 81.6 from a revised figure of 83 in April. However, national attitudes feel even more, with national May consumer sentiment plummeting 5.4 points.
Among the five components that make up the complete index, two increased and three decreased.
Current conditions: Floridians’ opinions about current economic conditions grew slightly more optimistic in May. Views of personal financial situations now compared with a year ago increased three-tenths of a point from 72.6 to 72.9. Similarly, opinions as to whether now is a good time to buy a major household item, like an appliance, increased seven-tenths of a point from 76.7 to 77.4. Opinions were a bit split across socio-demographic groups, though, with women and people age 60 and older expressing less favorable views.
“It is not surprising that Floridians reported that their current economic situation was more favorable compared with a year ago,” says Hector Sandoval, director of the Economic Analysis Program at the University of Florida’s (UF) Bureau of Economic and Business Research. “Florida’s unemployment rate peaked at 14.2% in May last year, while the number of continued claims of unemployment benefits reached over 2.1 million, meaning that around 25% of the labor force was receiving unemployment insurance. Nonetheless, it’s surprising that perceptions of current economic conditions increased only marginally, suggesting that a long climb is still ahead.”
Future expectations: On the other hand, the three components corresponding to Floridians’ expectations about future economic conditions declined in May. Expectations of personal finances a year from now decreased 1.5 points from 92.3 to 90.8, and attitudes about U.S. economist conditions in one year decreased 2.1 points from 85.7 to 83.6.
In a switch, men held a generally less favorable view of the U.S. economy in one year than women, but women had a less favorable view of the current economy.
Finally, expectations of U.S. economic conditions over the next five years was also down. It dropped 4.3 points from 87.5 to 83.2, the largest decline in UF’s May reading.
“Overall, Floridians are more pessimistic in May, stemming from their perceptions about future economic conditions, particularly the long-run national economic situation,” Sandoval says. “Although the economy is bouncing back, future expectations can be explained by the recent jump in inflation that will decrease purchasing power over time if it is not temporary, as anticipated by economists.”
While May’s drop seemed a change of course for Floridian’s attitudes, Sandoval says the attitude index has “remained largely unchanged over the past six months.” He expects the index to continue hovering around the same range in UF’s future reports.
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