Florida Consumer Sentiment: Floridians are Feeling Better About the Economy

Florida consumers seem more optimistic than they’ve been in more than two years.

Floridians’ overall sentiment increased 3.1 points to 72.6 in January from the previous month (Figure 1) — the highest level since September 2021, according to the latest survey from the University of Florida’s Bureau of Economic and Business Research (BEBR).

Source: University of Florida Bureau of Economic and Business Research

“Overall, Floridians start the year with optimism,” said Hector Sandoval, director of the Economic Analysis Program at BEBR, which has gauged the sentiment of Florida consumers for more than 50 years.

Despite the rosier outlook, though, Florida consumers aren’t feeling as good as folks in most other states. Florida’s overall sentiment increased 7.3 points over the past year, but the outlook of consumers nationwide rose more — 9.3 points to 79. The national consumer yardstick is generated monthly by the University of Michigan, and it comes at a time the national economy has performed fairly well, with low unemployment, stronger-than-expected job growth and cooling inflation. Economists no longer talk about a possible looming recession. Sandoval also noted the Federal Reserve is poised to consider interest-rate cuts later this year, which would provide more support to the economy and maintain the economic expansion through 2024.

But why do Florida consumers seem less optimistic than those nationwide? Sandoval blamed higher inflation. “Inflation in Florida has remained elevated for a longer period of time and has not decreased like inflation in the rest of the country,” he said. And, broadly, “while inflation has cooled down, consumers tend to focus on price levels. A slowdown in inflation does not mean that prices are back to where they were before, but rather that they are just increasing at a slower rate.”

Even so, surveyed Floridians seemed more optimistic in January when asked to respond to five questions about the U.S. economy and their personal economic situation now and in the future. Four of the five components that make up the index increased in January, and one was unchanged. Opinions about whether now is a good time to buy a big household item such as a refrigerator or furniture increased 1.7 points from December and 7.4 points from January 2023. Men had more favorable views than women, and those older than 60 were more positive than those under 60.

Floridians were feeling better about future economic conditions, including their own personal finances. Consumers’ expectations about personal financial situation a year from now increased 3.8 points from December and 5.7 points from January 2003. Similarly, views of U.S. economic conditions over the next five years climbed 5 points from December and 9.3 points from January 2023.

“The surge in consumer sentiment in January stems from the positive shift in Floridians’ expectations about the future, especially regarding the national economy,” Sandoval said. The growing optimism “indicates robust consumer spending, which will keep the favorable economic outlook in the upcoming months.”

Details on the survey

UF’s latest study reflects the responses of a demographic sampling of 722 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