At 62.9, June’s Fla. consumer sentiment was 2.1 points higher than in May. A UF economist says it “comes as a surprise” given inflation and other challenges.
GAINESVILLE, Fla. – Consumer sentiment among Floridians ticked up for the first time in 2022, rising 2.1 points in June to 62.9 from a revised figure of 60.8 in May.
In contrast, national consumer sentiment sank to its lowest level on record.
“The increase in June’s consumer confidence in Florida comes as a surprise, considering the persistently high inflation,” says Hector H. Sandoval, director of the Economic Analysis Program at the University of Florida’s (UF) Bureau of Economic and Business Research. “In almost every consumer category, prices are rising, but energy prices are particularly high, squeezing consumers at the pump. Statewide, gasoline prices have reached record levels in recent weeks.”
Sandoval also noted that May’s numbers were revised downward to 60.8, so June’s improvement is coming back from the second-lowest index number ever recorded in Florida.
Among the five components that make up the index, four increased and one decreased.
Current conditions: Floridians’ opinions about current economic conditions were mixed. Views of personal financial situations now compared with a year ago decreased by one-tenth of a point, from 54.8 to 54.7.
On the other hand, opinions as to whether it’s a good time to buy a major household item like an appliance increased 3.2 points from 50.2 to 53.4 – a view shared by Floridians across all sociodemographic groups.
Future expectations: The three components corresponding to Floridians’ expectations about future economic conditions were more optimistic in June. Expectations of personal finances a year from now showed the greatest increase in this month’s reading, up 3.9 points from 74.1 to 78.
Expectations about U.S. economic conditions over the next year rose 1.9 points from 58.6 to 60.5, while the outlook of U.S. economic conditions over the next five years increased 1.2 points from 66.4 to 67.6.
“Overall, Floridians are more optimistic in June,” says Sandoval. “The increase in consumer confidence is fueled by improvements in Floridians’ expectations about their personal financial situation one year from now, and their opinions about whether now is a good time to buy a big-ticket item.”
But Sandoval says those “views contrast with the current economic outlook. As inflation is running at a four-decade high, the Fed has approved the largest interest rate increase since 1994 and has indicated that it expects to raise it further this year, increasing the risk of recession. Even though the labor market has remained strong, higher interest rates will increase the cost of borrowing and slow business growth, which will weaken the job market. Looking ahead, the outlook for consumer sentiment in the near future is pessimistic.”
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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