One way to view the outlook of Floridians is they are seeing a glass that’s half empty. But at least they’re not seeing an empty glass.

That’s our takeaway of the latest survey gauging the sentiment of Florida consumers, which fell in September to an index of 66.3 (Figure 1). Despite a decline of nearly 3 points from June, the number was better than 64.5 in the same period a year earlier, according to the University of Florida’s Bureau of Economic and Business Research (BEBR), which tracks the outlook of Florida consumers. Yet, paradoxically, surveyed consumers said they’re personally feeling worse off than a year ago.

Source: University of Florida Bureau of Economic and Business Research

“The drop in consumer sentiment was largely fueled by Floridians’ views about their personal financial situation now compared with a year ago, which plummeted sharply in September,” said University of Florida economist Hector Sandoval.

The rather muddled mood in the latest month reflects the impact of Hurricane Idalia. The major hurricane smashed the state’s Big Bend region on Aug. 30 and flooded other areas along Florida’s west coast, causing an estimated $2.2 billion in privately insured property losses, business closures and agricultural production losses. Sandoval bets that the effect of Idalia on consumers’ outlook won’t long persist. “These economic disruptions are not expected to have a lasting effect on the economy and consumer sentiment, as the impact of such disasters on consumer sentiment, in particular, tends to be short-lived.”

High inflation in parts of Florida

The latest survey was also conducted during a period when the Federal Reserve voted to maintain interest rates at a 22-year high. Despite the Fed’s aggressive increases in interest rates, the U.S. economy has performed well, Sandoval said, noting the “remarkable resilience” of the labor market and expectations for the U.S. annual inflation rate to continue to decline by the end of 2023.

Even so, Florida consumers seem increasingly worried about high prices. Big pockets of the state faced elevated inflation: South Florida’s rate was 7.8% in August — more than twice the national rate of 3.7% — and the Tampa Bay area’s stood at 5.9%. Sandoval could only speculate that elevated inflation in these highly populated regions, plus higher borrowing costs, contributed to consumers’ more pessimistic views regarding their personal financial situations.

Statewide, consumer sentiment has alternated between small increases and decreases in recent months, resulting in no overall improvement. As a result, it is on track to be one of the top three most depressed years since 1985, Sandoval said. “We anticipate that consumer sentiment will continue to remain low in the months ahead.”

Details on the survey

Each month, University of Florida researchers ask a demographic sampling of Floridians five questions about the national economy and their personal economic situation now and in the future. In September, two of the five index components increased, two decreased and one was unchanged. UF’s study reflects a cross section of roughly 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