Consumer confidence falls as inflation rises in Florida

Consumer confidence falls as inflation rises in Florida

The Florida consumer confidence index declined in May 2022. Currently, it is slightly higher than in June 2008, at the heat of the "Great Recession" of the global financial and economic crisis. The index also shows that it is connected to the inflation rate.

In total, the index consists of five indicators. Four of them have already declined.

As of May this year, the index showed 61.5 points as a result of the fall. This is 2 points lower than it was recorded a month earlier, at 63.5 points, in April. Thus, May became the second month in a row to show a decrease in confidence among buyers. The current rate is only 2.7 points higher than in June 2008. It was 58.8 points.

Generally, since the beginning of 2022, the mood among Florida residents has shown no signs of improvement. Confidence has been decreasing since July 2021 in global terms. This process started a month after the annual inflation rate showed an increase for the first time and led to the price growth of all goods in the country. The annual inflation rate exceeded 5% during that time.

In the current situation, Florida residents believe that their savings have depreciated or decreased by 3.9 points over the year, from 58.8 to 54.9. The number of people who believe that today is a good time to purchase a home decreased by 1.1 points, from 51.7 to 50.6.

Local residents have mixed forecasts and expectations. Expectations that the financial condition will improve over the next year, increased from 74.4 to 74.8 points. At the same time, expectations that the country's economic condition will get better during the year decreased by 3.1 points, from 63 to 59.9.

Positive expectations about the US economy in the following five years dropped by 1.9 points, from 69.4 to 67.5. All demographic categories in Florida expressed a pessimistic outlook on the economic future of the country and the state in the near future.

Despite the fact that the residents of the state spoke positively about the possible improvement in their personal financial condition, there was some general consensus that the global economic perspectives for the United States were rather pessimistic. The fact that current inflation is the highest in the last 40 years is a valid point for pessimism.

The increase in interest rates by the US Federal Reserve will continue at least until the end of 2022. It does not inspire positive confidence in people. Potential customers understand that the further away, the more expensive everything will be: cars, housing, loans. Unemployment is expected to grow and business activity to decline.

Analysts expect that the pessimistic expectations will continue for at least the next few months, as the effect of rising interest rates has yet to show itself among the population. Additionally, current problems continue to have an influence. It is about the Russian-Ukrainian conflict, the food crisis, growing energy prices, and the ongoing policy of “zero tolerance” for COVID-19 in China, which still leads to massive and comprehensive “lockdowns” in the country.

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