Consumer confidence has plunged in Florida according to the University of Florida’s Consumer Sentiment Index, reflecting the broad concerns over the current and future economic conditions. The University of Florida’s Consumer Sentiment Index dropped 6.7 points to 93.3 in August, which was the most significant decline in a four-year course. All of the five components that make up the index fell in Thursday’s report.
The Florida results track consumer confidence nationwide, posting a sharp decline in the University of Michigan’s U.S. reading for August. Floridians also felt less confident that now is the time to spend on a big-ticket household item, with further evidence that their opinions about current economic conditions have deteriorated, said Hector H. Sandoval. Sandoval is the director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
Among the escalating trade war with China and the new tariff threat with Mexico, May was the last time the consumer confidence declined across all five of its components. “In this month’s reading, these less-favorable opinions and expectations are most likely due to the ongoing trade war with China and the new round of tariffs starting Sept. 1 and Dec. 15,” said Sandoval. “The inversion of the yield curve that occurred in mid-August indicated that markets were anticipating a slow economic growth ahead and a recession in the following months”.
“Although the latest movements in consumer confidence anticipate a declining economic position, economic indicators in Florida are still favorable,” Sandoval said. Approximately 70% of all economic growth is driven by the consumers’ sentiments spending it on goods and services which are the main keys driving the force of the U.S. economy. Florida’s economy keeps enlarging, adding over 227,000 to the payrolls over the year. The jobless rate dipped to 3.3% in July in the Sarasota-Manatee region.
“Despite the positive economic indicators, we anticipate further declines in consumer confidence in the coming months due to the ongoing trade war with China, threats of higher tariffs and the recent signs of the beginning of a slowdown,” said Sandoval. The consumer sentiment among the Floridians hit 101.7 in April, becoming the highest level since March of 2002. Before rebounding in June and July, the index fell to 96.0 in May.
In July, all of the figures were revised. Between the five components making up the Florida index were Floridians’ opinions of their current personal financial situations which fell 9.2 points to 87.1, the steepest decline in the August reading, according to heraldtribune.com. Many still wonder whether it was a good time to buy a major household item, like a refrigerator, and it decreased its likelihood with 5 points to 98.9. The expectations of the personal financial situations a year from now could drop with 5.5 points to 102.6.
Their views of the U.S. economic conditions over the next year plunged 7 points to 90.4. As for the confidence in the U.S. economic conditions over the next five years has posted a 6.9-point deterioration to 87.5. The study was conducted Aug. 1-29, and it reflects the responses of 403 individuals who were reached via cellphones, which represented a demographic cross-section of Florida.
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