Floridians are getting more pessimistic about their own finances and the future of the nation’s economy, according to researchers at the University of Florida.
In August, the university’s Bureau of Economic and Business Research interviewed 403 residents on their cell phones and found a drop in consumer confidence of more than 6 points, the biggest monthly drop since May 2015.
Researchers use the survey results to create an index measurement of consumer confidence ranging from 2 (as bad as it gets) to 150 (couldn’t be any better). In August, the overall index dropped from 100 in July to 93.3.
Researchers say two questions highlight the reasons for what they describe as a “sharp decline”:
• How do you feel about your own finances compared with a year ago? This was the area where the survey found the steepest decline: more than 9 points. Women, those 60 and older and those making less than $50,000 a year were the most worried.
• Is now a good time to make a major household purchase, like an appliance? More women said no. More men still thought this was a good time to buy.
“Overall, these two components indicate that Floridians’ opinions about current economic conditions have deteriorated in August,” Hector H. Sandoval, the director of the bureau’s Economic Analysis Program, said in announcing the survey results on Thursday.
At the same time, those surveyed also had lower expectations about where their own finances will be a year from now, as well as where the U.S. economy will be in a year and five years from now. Again, researchers said, nearly all Floridians shared those expectations, but the outlook was especially gloomy among women.
“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,″ Sandoval said.
Also, he said, in mid-August the market for U.S. Treasury bonds signaled that investors are anticipating slow economic growth and a recession. The signal was the inversion of the “yield curve,” something that happens when investors look for safe places to put their money and cause the interest rates for 2-year bonds to rise higher than those for 10-year bonds.
Floridians’ growing pessimism is consistent with a similar drop in consumer confidence nationwide found by researchers at the University of Michigan. One in three consumers interviewed by Michigan researchers spontaneously mentioned tariffs as something that undermined their hopes for better times ahead.
Despite the grim outlook, Sandoval said measures of Florida’s economy are still favorable. The state added 227,200 jobs and the unemployment rate dropped to 3.3 percent in July.
But those good numbers might not be enough to prop up consumers’ spirits.
“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,” Sandoval said.