| Sarasota Herald-Tribune
Florida consumers, whose spending drives the state economy, lost confidence again in their financial situations as the coronavirus pandemic continues to cause economic damage.
After showing rising confidence for two months, consumers were more pessimistic in July while the pace of the economic recovery slowed, according to the University of Florida’s Consumer Sentiment Index.
The index dropped 2 points from a revised 82.5 in June, although that was not as steep as the 5.6-point dive in consumer sentiment nationwide.
Four of the five components that comprise the Florida measure were down over the month.
“Floridians are more pessimistic in July, anticipating a longer economic recovery,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research. “Most of the pessimism comes from the overall expectations about the outlook of U.S. economic conditions in the short- and long-run.
“With an economy largely depending on tourism and a lack of steady flow of tourists, the labor market is poised for a long recovery,” he said.
Most economists believe the Florida economy entered into a recession in March, when businesses began shutting down. Since mid-March, the state has processed more than 3 million jobless claims.
The Sarasota-Manatee economy took a staggering $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 those three months, according to the StratoDem Analytics data firm in Cambridge, Massachusetts.
The Sarasota-Manatee jobless rate hit a 30-year high of 14.1% in April before easing to 13.2% in May and 8.7% in June. One year ago, local unemployment stood at 3.4%.
More than 68,000 workers in Sarasota-Manatee have filed unemployment claims from March through July 18, 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.
“Currently, an important share of the labor force is receiving unemployment benefits and new applications for benefits have continued to pile up in July,” Sandoval said. “Over the last weeks, it has been unclear whether additional payments from the federal program are coming, thus further increasing the uncertainty and pessimism among Floridians.”
Opinions among Florida consumers about current economic conditions were mixed. Views on their personal financial situations now compared with last year increased, but more people felt now is not a good time to spend money on a big-ticket item like an appliance.
Florida residents also were more pessimistic about their personal finances a year now, and about the U.S. economy next year and five years down the road.
Women and residents with incomes under $50,000 held consistently less favorable opinions, the survey said.
“Looking ahead, we expect consumer confidence to decline as Floridians must cope with both the pandemic and the hurricane season, which can further delay the recovery efforts,” Sandoval said.
Conducted July 1-30, the study reflects the responses of 460 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.