While not outrageously positive, the mood of Florida consumers has rebounded from a trough last summer when a spike in inflation rocked the economy, according to the most recent surveys from the University of Florida’s Bureau of Economic and Business Research (BEBR).

The economic outlook of Floridians increased in May to an index of 68.8, up from 60.8 a year earlier and fourth bump in the previous five months (Figure 1). The improved outlook goes along with a healthier U.S. Consumer Price Index, which has steadily declined from 9.1% in June last year to below 5%, according to the U.S. Bureau of Labor Statistics.

Source: University of Florida Bureau of Economic and Business Research

“This positive trend is consistent with a strong labor market and aligns well with the general decline in inflation levels since its peak in June 2022,” said Hector Sandoval, director of economic analysis at BEBR.

Each month, UF asks a demographic sampling of Floridians questions about the national economy and their personal economic situation now and in the future. In May, the latest period with data, three of the five index components increased from April while two decreased. But all the indexes increased from the same period a year earlier.

Surveyed Floridians were more optimistic when asked to compare their personal financial situation to a year ago — 63.5 this May vs. 54.8 in May 2022. Respondents said their outlook for their personal finances a year from now were also generally positive, 83.3 vs. 74.1 a year earlier. Asked if now is a good time to buy a big-ticket household item such as a refrigerator or furniture, respondents’ views increased to 61.3 from 50.2 a year earlier.

Considering the overall economy, respondents’ expectations about U.S. economic conditions over the next year increased to 66.6 from 58.6. Lastly, the outlook of U.S. economic conditions over the next five years increased to 69.1 from 66.4. But this was a drop of 2.6 points from 71.7 in April.

The views in the latest survey were divided across sociodemographic groups. Overall, men, people with annual incomes over $50,000 and those younger than age 60 expressed the most favorable economic outlook.

Modeled after the University of Michigan’s U.S. consumer sentiment index, UF’s monthly study reflects the responses of a cross section of more than 500 Florida adults who were surveyed by cellphone or online. The index is benchmarked to 1966, which means a value of 100 equals the level of confidence that year. The highest index was 111 in August 2000 while the lowest was 59 in August 2008. The last time the index was over 100 was in February 2020 just before the onset of the COVID-19 pandemic (Figure 2).

Source: University of Florida Bureau of Economic and Business Research

Strong demand for labor

Despite the Federal Reserve increasing interest rates 10 times since March 2022, Sandoval noted that Florida’s labor market has remained robust, with strong demand for workers and low unemployment. In April, the state’s jobless rate held at 2.6%, while the leisure and hospitality industry showed the largest percentage gain in jobs.

The latest survey was conducted while politicians in Washington bickered over a deal to raise the government’s borrowing limit and prevent a default on U.S. debt repayments. The crisis was averted June 3 when President Biden signed a bipartisan bill to suspend the federal debt ceiling until January 2025.

The Florida results contrast with the national survey, which showed a decline in consumers’ sentiment to 59.2 in May from 63.5 in April, according to the University of Michigan’s Survey Research Center. A year earlier, the U.S. index stood lower at 58.4.

Sandoval indicated that Florida’s economy was poised to continue growing. “Despite concerns about persistent inflation, the recent turmoil in the banking sector, and the possibility of further interest rate hikes, we anticipate that consumer confidence among Floridians will continue to trend upward in the months ahead,” Sandoval said. “This is based on the expectation that Florida’s tourism industry will experience an increase in demand during the upcoming summer season.”