Floridians More Optimistic About Economy Overall

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Consumer sentiment among residents of Florida increased 1.5 points in July to 97.7, representing the second-highest reading since March 2002. Out of the five factors that make up the index, three increased and two decreased.

Overall views of one’s personal financial situation now likened with a year ago showed the largest decrease in the July reading, down 2.7 points from 91.1 last year to 88.4 for this July.

“However, perceptions are divided across the population,” said Hector H. Sandoval, Director of the Economic Analysis Program at University of Florida’s Bureau of Economic and Business Research. “Women, people 60 and older, and those with annual income under $50,000 held very positive views about their personal finance situation.”

Opinions as to whether it’s a good time to buy a major household item, such as an appliance, increased by 1.5 points, from 102.1 to 103.6.

“Overall, perceptions about current economic conditions have deteriorated slightly among Floridians in July as a consequence of the pessimism among the men and those under age 60,” Sandoval said.

Outlooks regarding personal finances a year from now ticked down nine-tenths of a point, from 104.7 to 103.8.

Outlooks regarding United States economic conditions over the next year showed the greatest increase in July’s reading, up six points from 91.8 to 97.8. Additionally, expectations of U.S. economic conditions over the next five years increased 4.1 points, from 91.1 to 95.2.

“Floridians are more optimistic,” Sandoval said. “The gain in July’s sentiment came from consumers’ future expectations about the economy in the medium and long run. Remarkably, these positive expectations are shared by Floridians across all demographics and economic levels.”

Since the beginning of the year, Florida’s labor market has strengthened further, with solid job gains each month. Between January and June, the Florida unemployment rate dropped by nine-tenths of a percentage point, from 5 to 4.1 percent. The unemployment rate is now at its lowest rate in 10 years – since July 2007 on the verge of the Great Recession.

Moreover, the labor force in Florida reached over 10 million workers in February. According to the U.S. Bureau of Economic Analysis, Florida’s gross state domestic product increased 1.4 percent and personal income grew 1.3 percent in the first quarter of 2017. The leading contributors to personal income growth for Florida were net earnings and transfer receipts, which include benefits received by persons from federal, state and local governments, and from businesses for which no current services are performed.

In view of the labor market conditions and inflation nationwide, last week the Federal Reserve decided to maintain the target range of the federal funds rate between 1 and 1.25 percent to support further strengthening in the labor market.

“The positive economic outlook in the first half of the year brought consumer sentiment in Florida to its highest levels in the last 15 years. There’s no evidence that economic conditions will change in the short run, thus high sentiment levels should persist in the second half of the year,” Sandoval said.