Consumer sentiment increased in January 2018 to 101.3 – just 0.7 from an all-time high, University of Florida (UF) economists state.
Although Florida consumer sentiment for February dropped 1.9 points to 99.4, it is still a relatively strong performance.
Among the five components that make up the index, one increased and four decreased.
Opinions of a person’s personal financial situation now compared with a year ago decreased 0.3 from 90.5 to 90.2.
Opinions as to whether this is a good time to buy a major household item declined the most in February. It fell 6.1 points from 106.7 to 100.6.
Two out of the three components that offer attitudes about future economic conditions also fell. Expectations of personal finances a year from now decreased 2.8 points from 109.7 to 106.9. In addition, anticipation of U.S. economic conditions over the next year declined 3.5 points from 104.3 to 100.8.
Expectations of U.S. economic conditions rose
The only component that increased was expectations of U.S. economic conditions over the next five years. This increased 3.4 points from 95.1 to 98.5.
Hector H Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research, says, “Although there is overall decline in short-term expectations, opinions are split by income levels and age. Those with income levels above $50,000 have negative expectations, while those with income under $50,000 hold positive opinions. Similarly, people under the age of 60 have strong negative expectations while people aged 60 and older have more positive opinions.”
The current economic conditions and the short-term expectations of the national economy are behind most of the pessimism in Florida. The early February plummet of the global stock market may explain some of this consumer worry.
“Despite the volatility in the stock market, general economic conditions in the U.S. and Florida remained favorable. Economic activity expanded and unemployment was remarkably low as the labor market continued to strengthen. The economy seems to be near or at full employment. It is expected that the labor market will tighten even more in the following months which will push wages up,” says Mr Sandoval.
Although February experienced a decline in consumer sentiment, confidence has been high since 2017.
The UF study featured responses from 334 individuals on cell phones. They represent a demographic cross-section of Florida. The benchmark of the index dates to 1966. This means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2, the highest is 150.