Two new reports show consumer sentiment increasing in Florida and the rest of the nation. According to Rassmussen Reports Economic Index, economic confidence increased to 102.2 this month,, more than four points higher than December. This is the fourth consecutive monthly increase in the index.
In addition to Rasmussen’s data, similar trends were seen in a study by the University of Florida’s Consumer Sentiment Index, conducted by UF’s Bureau of Economic and Business Research. UF’s report showed consumer sentiment among Floridians starting 2024 with the highest level over the last two years, increasing 3.3 points in January to 72.8 from the revised December figure of 69.5. Notably, national sentiment surged over nine points.“The surge in consumer sentiment in January stems from the positive shifts in Floridians’ expectations about the future, especially regarding the national economy. This growing optimism aligns well with the current economic outlook,” said Hector Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
“Contrary to expectations, the anticipated recession failed to materialize in 2023. Instead, a remarkably robust labor market, with unemployment at its lowest, boosted consumer spending, contributing significantly to the growth of the economy. Moreover, inflation has continued to ease in recent months. As a result, the Federal Reserve is poised to consider interest-rate cuts in the year ahead, providing further support to the economy and maintaining the economic expansion through 2024,” Sandoval added.
Among the five components that make up the index, four increased and one decreased.
Floridians’ opinions about current economic conditions were mixed in January. Views of personal financial situations now compared with a year ago decreased slightly four-tenths of a point from 56.6 to 56.2. However, these views were mixed across sociodemographic groups with women and people 60 and older expressing more favorable views. On the contrary, opinions as to whether now is a good time to buy a big-ticket household item such as a refrigerator or furniture increased 3.2 points from 61 to 64.2. These positive views were shared by all Floridians except for women, who reported less-favorable views.
Outlooks about anticipated economic conditions were positive. Expectations of personal finances a year from now increased 3.9 points from 81.6 to 85.5. Remarkably, opinions about U.S. economic conditions over the next year surged by 5.1 points from 71.6 to 76.7, the greatest increase of any reading this month. It is worth noting that over the past two months, this component has risen by over 10 points, indicating that Floridians anticipate a positive economic outlook in the coming year. Similarly, views of U.S. economic conditions over the next five years climbed five points, from 76.5 to 81.5. These optimistic views across the three components were shared by all Floridians.
“Overall, Floridians start the year with optimism. The increase in consumer confidence, particularly regarding future economic outlooks, indicates robust consumer spending, which will keep the favorable economic outlook in the upcoming months,” said Sandoval.
“Looking ahead, we expect further positive shifts in consumer confidence in the months ahead, particularly if the Fed interest-rates cuts materialize sooner rather than later,” Sandoval added.
Conducted Jan. 1 to 29, the UF study reflects the responses of 429 individuals who were reached on cellphones and 293 individuals reached through an online panel, a total of 722 individuals, representing a demographic cross section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a two, the highest is 150.
Details of this month’s survey can be found at https://www.bebr.ufl.edu/florida-consumer-sentiment.
