Consumer sentiment among Floridians rose last month to the highest level in 15 years, according to the latest University of Florida (UF) consumer survey.
The reading of 99 in March was the highest since March 2002 and the second-highest since November 2000. The 5.2-point March increase followed a dip in February, which ended the month with a revised reading of 93.8.
All five of the components that make up the index increased.
Floridians’ perception of their personal financial situation now compared with a year ago ticked up four-tenths of a point, from 88.1 to 88.5. Perceptions as to whether it’s a good time to buy a major household item such as an appliance rose 3.8 points, from 99.7 to 103.5.
“The increase in these two components shows that current economic conditions improved among Floridians in March,” says Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “In particular, women and those under age 60 displayed more optimistic perceptions.”
Short-term future expectations
The sub-index measuring Floridians’ personal finance expectations a year from now rose 7.8 points from 99.5 to 107.3. Opinions of anticipated U.S. economic conditions over the next year increased 7.2 points, from 92.0 to 99.2.
Similarly, expectations of U.S. economic conditions over the next five years rose 7.2 points, from 89.5 to 96.7.
“Overall, Floridians are far more optimistic in March than the previous month. The gain in March’s index came mainly from consumers’ future expectations about the economy. Importantly, these views are shared by all Floridians, independent of their demographic characteristics and socioeconomic status,” Sandoval says. “These expectations are particularly strong among women and those with an income under $50,000.”
U.S. consumer sentiment at the national level also remained positive in March at 96.9, according to the University of Michigan’s survey of consumers.
In Florida, consumer sentiment may have been lifted by good economic news. The Florida labor market has continued expansion, adding jobs on a monthly basis for more than six years. The unemployment rate in Florida remained unchanged at 5 percent in February, the most recent figure available. Over the last year, the unemployment rate has remained stable: Between March and December 2016, the unemployment rate was 4.9 percent, and since January the rate has been 5 percent.
According to the U.S. Bureau of Economic Analysis, Florida ranked third out of all states in the country in personal income growth, with a growth rate of 4.9 percent in personal income between 2015 and 2016. The main contributor to this change came from net earnings, which includes wages, salaries and supplements but excludes contributions for government social insurance.
Nationwide, economic activity and the labor market has continued to expand and strengthen, and household spending has risen. As a consequence, last month the Federal Open Market Committee decided to raise the federal funds rate to a target range of 0.75 to 1 percent.
“In general, the economic outlook is very positive and the positive sentiment will aid the economy to expand even further,” Sandoval said.
Conducted March 1-30, the UF study reflects the responses of 507 individuals who were reached on cellphones, 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.
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