Floridians become more cautious as economic outlook weakens in August

Consumer sentiment in Florida continued its downward trend in August, declining for the sixth consecutive month to 67.4, down 1.9 points from a revised July reading of 69.3. Similarly, national consumer sentiment decreased.

“Consumer sentiment deteriorated further in August, driven primarily by Floridians’ expectations for the national economy, particularly in the short run. In fact, views about the country’s economic outlook over the next 12 months have declined consistently over the past six months, falling nearly 17 points and reaching their lowest level since November 2023. This growing pessimism is consistent with an economic environment that remains challenging for consumers. Although inflation and gasoline prices have moderated recently, both remain elevated. At the same time, labor market conditions have softened over the past year, although recent developments in Florida’s labor market point to some stabilization. Combined with continued geopolitical uncertainty and recent trade policy changes, these conditions help explain why consumer sentiment has remained on a downward trajectory,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.

All five components that make up the index declined in August.

“It is also worth noting that this is the second consecutive month in which all five components of the index declined, a relatively uncommon occurrence showing that the recent decline in consumer confidence is not limited to just one aspect of the index,” Sandoval added.

Floridians’ views about current economic conditions weakened in August. Views of personal financial situations now compared with a year ago fell one point from 63.8 to 62.8. However, the decline was not shared across all demographic groups, as views improved among women, people aged 60 and older, and people with an annual income under $50,000. Similarly, opinions on whether now is a good time to buy a major household item, such as a refrigerator or a piece of furniture, decreased 2.5 points from 62 to 59.5. This decline was broadly shared across demographic groups, with the exception of people younger than 60, whose views improved.

Likewise, Floridians’ expectations about future economic conditions deteriorated. Expectations of personal financial situations a year from now declined slightly, by 0.3 point, from 80.2 to 79.9. However, this change varied across demographic groups, with expectations improving among men, people younger than 60, and people with annual incomes below $50,000. Expectations for U.S. economic conditions over the next year showed the steepest drop, falling 3.1 points from 68.5 to 65.4. Meanwhile, expectations for U.S. economic conditions over the next five years decreased 2.6 points from 72.2 to 69.6. The declines in expectations regarding the national economic outlook were broadly shared across sociodemographic groups, except for people with annual incomes below $50,000, whose expectations improved for both the short- and long-term outlook.

“The continued deterioration in expectations regarding the national economy over the next year is particularly notable and suggests that Floridians are becoming increasingly cautious about the economic outlook. Spending intentions have also been declining, although at a slower pace. Taken together, these trends suggest that consumers are becoming more budget-conscious and cautious about discretionary purchases, particularly major household items, as they navigate elevated prices, high borrowing costs, and lingering labor market uncertainty,” said Sandoval.

“Although inflation has moderated recently, it remains above the Federal Reserve’s target, and the central bank has signaled its readiness to act if price pressures persist. As a result, borrowing costs could stay elevated or increase further, adding pressure to household budgets and discretionary spending. Looking ahead, we expect consumer confidence to remain subdued until inflationary pressures ease more substantially,” Sandoval added.

Conducted July 1 to Aug. 27, the UF study reflects the responses of 358 individuals who were reached on cellphones representing a demographic cross section of Florida.
Data are weighted based on Florida county of residence, age group, and sex to ensure representativeness of the Florida population. The population figures used for weighting (targets) are obtained from the Population Program of the Bureau of Economic and Business Research (BEBR), which produces the official population estimates for the state of Florida. Phone data quality is maintained by monitoring and reviewing interviews and prevention of duplicate records.

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 2, and the highest is 150.

Details of this month’s survey can be found at bebr.ufl.edu/florida-consumer-sentiment/.