June consumer sentiment ticks upward though likely temporary
After a marginal gain in May, consumer sentiment among Floridians soared 6.1 points in June to 82.7 from May’s revised figure of 76.6. Similarly, national consumer sentiment increased 5.8 points.
Among the five components that make up the index, four increased and one decreased.
Floridians’ opinions of their personal finances now, compared with a year ago, increased slightly: eight-tenths of a point from 69.3 to 70.1. These opinions are split across sociodemographic groups; men, people older than 60, and people with an annual income above $50,000 expressed more favorable views while women, people younger than 60, and people with an annual income under $50,000 expressed less favorable views.
Opinions as to whether now is a good time to buy a big-ticket item, such as refrigerators, cars, or furniture showed the greatest increase in this month’s reading, surging 18.6 points from 58.2 to 76.8. Notably, these favorable views are shared by all Floridians, though men, people younger than 60, and people with an annual income above $50,000 reported stronger, more favorable opinions.
Floridians’ expectations about future economic conditions were mixed. On one hand, perceptions of ones’ personal financial situation now, compared with a year ago, decreased 3.6 points from 99.3 to 95.7. This trend was shared across all demographic groups for Floridians. On the other hand, outlooks about expected national economic conditions showed an important increase. Expectations about the U.S. economic conditions over the next year increased 7.5 points from 72 to 79.5. Similarly, the outlook of U.S. economic conditions over the next five years increased 7.6 points from 84 to 91.6. These upward readings were shared by all Floridians with the exception of people older than 60, whose readings showed more pessimistic views.
The increase in June’s confidence comes from consumers’ responses to whether now is a good time to buy a big-ticket item and from their anticipations about national economic conditions in the short- and long-run. “When consumers feel more optimistic about their economic prospects, they are more comfortable increasing their spending, particularly on big-ticket items. Coupled with the fact that businesses around Florida were allowed to reopen and operate at an increased capacity in June, the increase in consumer confidence is a positive sign for the state’s economy,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
Although Floridians’ consumer confidence showed a noticeable increase in June, driven by consumers’ responses to purchasing conditions, confidence levels remained far from the ones observed in February, before the pandemic spread. The difference in consumer confidence between February and June is almost 20 points.
“Nonetheless, as weekly claims of unemployment benefits continue mounting up, with almost one million of continued claims reported in the first weeks of June and a record unemployment rate of 14.5% in May, Florida’s economic recovery looks poised to be a prolonged effort,” Sandoval added.
“Looking ahead, as a record number of cases are reported in Florida by the end of June and with the state starting to roll back some of their reopening plans, we expect consumer confidence to decrease in July, slowing the economic recovery,” Sandoval said.
Conducted June 1-25, the UF study reflects the responses of 203 individuals who were reached on cellphones and 226 individuals reached through an online panel, a total 429 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 2, the highest is 150.
Details of this month’s survey can be found at http://www.bebr.ufl.edu/csi-data
Writer: Perry Leibovitz, firstname.lastname@example.org
Contact: Hector Sandoval, 352-392-2908, ext. 219, email@example.com