Consumer confidence has slumped again in Florida over growing concerns about personal finances in the coronavirus pandemic.
Consumers, whose spending drives the Florida economy, expressed a level of pessimism about their financial situations that hit a 6½-year low, according to the University of Florida’s Consumer Sentiment Index released on Tuesday.
The overall index declined for the second straight month, falling 2.1 points to 78.4 in August. Three of the five components that comprise the state measure were down over the month, while two were up.
“The decline in consumer sentiment, particularly in Floridians’ views about their personal finances, comes as no surprise,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “The resulting loss of tourism business from the pandemic has continued to severely impact Florida’s economy. The state’s unemployment rate remained at historically high levels in July; coupled with the expiration of the weekly $600 in enhanced unemployment benefits from the federal government at the end of July, the economic situation deteriorated for those out of work.”
Most economists believe the Florida economy entered into a recession in March, when businesses began shutting down in an attempt to slow the spread of the virus. Since then, the state has processed more than 3.7 million jobless claims.
The Sarasota-Manatee economy took a stunning $3.7 billion hit during the second quarter from the loss of economic activity caused by the coronavirus pandemic. The two-county region’s economy plunged by a more than 40% annual rate in gross domestic product during the April-June period, according to the StratoDem Analytics data firm in Cambridge, Massachusetts.
More: Sarasota-Manatee economy takes $3.7 billion blow
The Sarasota-Manatee jobless rate hit a 30-year high of 14.1% in April before easing to 13.2% in May and 8.5% in June, then rising again to 9.4% in July. One year ago, local unemployment stood at 3.4%.
More than 72,700 workers in Sarasota-Manatee have filed unemployment claims from March through Aug. 15, the Florida Department of Economic Opportunity said.
Economists closely track consumers’ moods because their spending on goods and services is the key driver of the U.S. economy, accounting for approximately 70% of all economic growth.
Floridians’ opinions about their personal finances now compared with a year ago posted the steepest decline, reaching the lowest mark since February 2014. They also were more pessimistic about whether now is a good time to buy a major household item, such as an appliance, and about their outlooks about their financial situations a year from now.
But they were more optimistic about national economic conditions next year and five years from now.
Sandoval noted the Florida labor market showed signs of recovery in August, with a downward trend in new claims of unemployment benefits and continued claims. But both those indicators remain well above pre-pandemic levels, signaling a slow recovery pace.
“Overall, Florida’s economic prospects remained depressed, but important signs of an improved labor market appeared in August,” he said. “Looking ahead, as Florida applies for the $300 in enhanced federal unemployment benefits, we anticipate an improvement in the financial situation for those out of work and a slight increase in consumer confidence.
“Nonetheless, we expect consumer sentiment to remain far from pre-pandemic levels for a while,” he said.
Conducted Aug. 1-27, the study reflects the responses of 432 individuals who were reached either on cellphones or through an online panel. The index 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.