Florida consumers are more optimistic about the economy, according to the latest survey from the University of Florida’s Bureau of Economic and Business Research (BEBR). Consumer sentiment among Floridians rose for the fourth consecutive month in September to 78.3 points, up 1.6 points from a revised figure of 76.7 in August (Figure 1). The numbers are based on an index, with 100 equal to the consumers’ confidence level when BEBR began the survey more than 50 years ago. At the same time, U.S. consumer sentiment increased over 2 points for the second straight month.

Source: University of Florida Bureau of Economic and Business Research

Floridians’ optimism is primarily driven by their positive views on the nation’s economy, reflecting economic trends and decreasing inflation. This follows the Federal Reserve’s 50-basis point cut in interest rates in mid-September, which will reduce borrowing costs for consumers and businesses. Annual inflation continued to decline, with the Consumer Price Index (CPI) falling to 2.5% in August. The labor market remains stable, with the U.S. unemployment rate slightly declining to 4.2% and Florida’s rate holding at 3.3% in August.

“The decrease in interest rates should boost discretionary spending, encourage business expansion through increased investment and hiring, and further enhance confidence among Floridians,” said Hector Sandoval, director of the Economic Analysis Program at BEBR.

Floridians’ opinions about current economic conditions were mixed. Their views of their personal financial situations now compared with a year ago decreased 1 point. But opinions about whether now is a good time to buy a major household item like an appliance rose 1.3 points. The three components related to Floridians’ anticipation about future economic conditions were positive. Consumers expect their personal finances will improve a year from now, with this index increasing 1.1 points. Overall U.S. economic conditions during the coming year saw the largest increase, rising 4.4 points to their highest level in four years. Similarly, expectations of U.S. economic conditions over the next five years rose 2.1 points.

Hurricanes

Sandoval said recent major hurricanes that caused extensive property damage and economic loss will undoubtedly affect consumers’ sentiment in October. Hurricanes Helene and Milton punished Florida in a span of less than two weeks — Helene made landfall on Sept. 27 in the Big Bend region and Milton struck on Oct. 9 near Sarasota. “The occurrence of two storms in a short period of time is likely to have a greater negative effect, especially since the hurricanes affected different areas of Florida, resulting in a larger number of people impacted,” he said. “Typically, the effects of hurricanes on consumer sentiment are short-lived, so I expect this decline to affect only October’s reading, despite being the cumulative impact of two storms,” he added. “By November, the outcome of the presidential election will likely play a major role in shaping consumer sentiment.”

Details on the Survey

UF’s latest survey reflects the responses of a demographic sampling of 550 Florida adults who were contacted by cellphone or online between Aug. 1 and Sept. 29. Launched in 1966, the survey’s 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