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Florida consumer confidence broke records in 2017
GAINESVILLE, Fla. – Jan. 2, 2018 – Consumer sentiment in December fell both nationally and among Floridians, dropping 1.4 points month-to-month in Florida to 95.9, according to the latest University of Florida (UF) consumer survey. However, the average monthly index in 2017 surpassed 2016 by an average 4.6 points.
Among the five components that make up the December index, one increased and four decreased.
Opinions as to whether it’s a good time to buy a big-ticket household item rose 3.5 points, from 101.1 to 104.6. Perceptions of one’s personal financial situation now compared with a year ago dropped 1.3 points from 90 to 88.7.
“This drop was not found among men, those aged 60 and older, or those with an income under $50,000. It’s worth noting that the biggest drop regarding current personal finances was among respondents with an income of $50,000 or greater,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
The three components representing expectations of future economic conditions all declined in December. Expectations of personal finances a year from now dropped 2.9 points, from 105.4 to 102.5; anticipated U.S. economic conditions over the upcoming year decreased 2.5 points, from 96.9 to 94.4; and expectations of U.S. economic conditions over the next five years showed the biggest drop, down 3.6 points from 93 to 89.4.
“Most of the pessimism … comes from unfavorable expectations about the state of the U.S. economy over the next five years. Remarkably, these negative perceptions are shared across all demographics in Florida and are strongest among those with an income level over $50,000. Additionally, the pessimism may reflect concerns over daily financial debates by the U.S. government this month,” Sandoval says.
Year-to-year improvements
Florida began 2017 with a three-month, record-breaking increase in consumer sentiment. March 2017 reported the highest consumer sentiment level since March 2002, contributing to an average of 96.1 in the first half of the year. Consumer sentiment readings generally fell every month after August though the average consumer sentiment for the second half of 2017 was 96.3 points, two-tenths of a point higher than the first half.
“Notably, the average consumer sentiment in 2017 is 4.6 points higher than last year’s average, and it’s the highest average since 2000. Overall, Floridians are far more optimistic in 2017,” Sandoval said.
Economic indicators in Florida have remained favorable throughout 2017. The labor market experienced solid job gains and a decreasing unemployment rate. The latest figure available shows the monthly unemployment rate in Florida dropped two-tenths of a percentage point to 3.6 percent in October.
The Federal Reserve’s December decision to raise interest rates by a quarter of a percentage point reflects their confidence that nationwide economic activity will continue expanding at a moderate rate and that the labor market will remain strong.
“As the year ends with an overall high level of consumer sentiment and a positive economic outlook among Floridians, there are good financial prospects for 2018. We expect consumer sentiment in January to remain around the average 2017 levels,” Sandoval said.
Conducted Dec. 1-18, the UF study reflects the responses of 427 individuals who were reached on cellphones, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966. The lowest index possible is a 2, the highest is 150.
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