Consumer sentiment among Floridians rose in March by more than 3 points to 96.8, the highest reading in 10 years, according to a monthly University of Florida survey.
GAINESVILLE, FL – March 28, 2015 – Consumer sentiment among Floridians rose in March by more than 3 points to 96.8, the highest reading in 10 years, according to a monthly University of Florida (UF) survey. All five components that make up the index increased.
"Florida consumers are particularly optimistic about the future," says Chris McCarty, director of UF's Survey Research Center in the Bureau of Economic and Business Research. "The three components that are forward-looking are much higher than they have been for quite some time."
Expectations of personal finances a year from now increased 2.4 points to 103.6, the highest level since August 2004. Perceptions of U.S. economic conditions over the next year rose 1.2 points to 94.6, while expectations of U.S. economic conditions over the next five years increased 3.4 points to 93.6, the highest since July 2004.
On the question of whether now is a good time to buy big-ticket items such as a car or appliance, March saw an uptick of 7.4 points to 106.1.
"Overall the index reflects a Florida consumer who is really feeling a recovery," McCarty says.
While increases in the overall index were broad-based across age and income groups, there were some differences.
Gains in the component comparing personal finances now with a year ago were higher among households making less than $50,000, up 4.5 points, compared with those making more than $50,000, which decreased 1.9 points.
An even greater difference was noted in expected U.S. economic conditions over the next five years, but the trend was reversed: The outlook for those making under $50,000 per year decreased slightly by 2 points, but for those making more than $50,000, it surged up 9.4 points.
"This reflects lower-income households who have made some gains recently but are less optimistic about the future. Upper-income households appear to be happy with future trends," McCarty says.
Floridians at various income levels may have different reasons for a positive outlook. Those invested in the stock market have cause for optimism as stock values recovered from a mid-month decline and approach record levels. For lower-income Floridians, gas prices remain low and are likely to stay there for a while because of the strengthening U.S. dollar, the currency used for international oil exchange.
Other economic data for Florida are positive, according to UF:
- Housing prices increased in February to $180,000 for the median price of a single-family home, up $5,000 from the previous month and a 9.1 percent increase from a year before.
- Mortgage rates have been declining over the past month and are once again near historic lows.
- The Florida unemployment rate remained steady at 5.7 percent in January. While the "U6" measure of unemployment that also counts part-time and discouraged workers is still higher in Florida (12.8 percent) compared with the U.S. (12 percent), it has declined considerably from 19.3 percent in 2010.
"For now, Florida's economy is doing quite well, with the caveat that wages remain persistently stagnant," McCarty says. "But many economists see signs that wages will pick up. The rate of people who quit a job is up to 2 percent in January from 1.7 percent a year ago, suggesting that workers see better-paying opportunities which later translate to higher wages."
Conducted March 1-23, the UF study reflects the responses of 419 individuals who were reached on cell phones, 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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