Consumer sentiment in Florida increased slightly in January, reaching 86.9, up from a revised 86.7 in December. This contrasts with a national decline of nearly 3 points, the first drop in six months.
Floridians have a more positive outlook on current economic conditions but are concerned about the future. The increase in sentiment was largely due to improved spending intentions. However, expectations for the future fell, likely influenced by the Federal Reserve’s decision to pause interest rate cuts as inflation remains above its 2% target. This situation makes households, especially borrowers, more susceptible to the dual pressures of inflation and high interest rates.
Among the five components of the sentiment index, two increased while three declined. Optimism about personal financial situations improved, rising from 61.6 to 62.6. The view that now is a good time to buy major household items, like refrigerators, jumped 4.7 points to 78, the highest in over four years. However, older Floridians (60 and over) and those earning under $50,000 were less optimistic.
The boost in spending intentions may be linked to concerns about trade policies, with consumers possibly anticipating higher prices due to tariffs and ongoing inflation.
Conversely, confidence about future economic conditions decreased. Expectations for personal financial situations a year from now dropped slightly from 102.6 to 102.3. Women and those earning over $50,000 had more positive expectations compared to others. Outlooks for U.S. economic conditions over the next year saw a sharper decline, from 99.4 to 96.5, while expectations for the next five years fell from 96.5 to 95.2.
Looking ahead, uncertainties from new immigration and trade policies may impact consumer sentiment. Tracking these changes will be important to understand how they affect consumer attitudes.
The survey, conducted from December to January, included 578 participants, representing a cross-section of Florida. The index used is benchmarked to 1966, with a value of 100 indicating the same level of confidence as that year. More details are available at bebr.ufl.edu/florida-consumer-sentiment/.
