Florida’s Office of Economic and Demographic Research (EDR) reported that general revenue collections for May 2022 were $741.8 million (21.0 percent) over the estimates made in January 2022. In addition, consumer confidence among Floridians rebounded in June while national consumer sentiment fell sharply.
Revenues generated from the sales of automobiles were the highest above the projections among the six sales tax categories coming in at $148.75 million (31.1 percent) over the May estimate.
Also contributing to the higher than projected sales tax revenues were the “Tourism” and “Business” categories, both surpassing estimates by over 26%.
As shown below, all six of the sales tax categories were over the estimate for the month:
• Consumer Nondurables…gaining $159.3 million (19.8 percent) to the estimate for the month.
• Tourism…gaining $157.9 million (26.6 percent) to the estimate for the month.
• Automobiles…gaining $148.75 million (31.1 percent) to the estimate for the month.
• Other Durables…gaining $28.8 million (18.9 percent) to the estimate for the month.
• Building…gaining $37.7 million (18.9 percent) to the estimate for the month.
• Business…gaining $132.2 million (26.9 percent) to the estimate for the month
The EDR report noted that “the Consumer Price Index for the all items index increased 8.6 percent for the 12 months ending May—higher than the 8.3 percent figure for the period ending in April. The immediate response to inflation is an increase in sales tax collections that reflects the higher prices.”
The report warned that persistent inflation conditions could “ultimately suppress collections as consumers begin to spend more money on non-taxable necessities like food and healthcare. In this regard, prices for food at home increased by 11.9 percent in May, the largest 12-month percentage increase since the period ending April 1979.”
Despite the concerns over inflation, consumer sentiment among Floridians ticked up for the first time in 2022, up 2.1 points in June to 62.9 from a revised figure of 60.8 in May.
“The increase in June’s consumer confidence in Florida comes as a surprise considering the persistently high inflation. In almost every consumer category, prices are rising, but energy prices are particularly high, squeezing consumers at the pump. Statewide, gasoline prices have reached record levels in recent weeks,” said Hector H. Sandoval, director of the Economic Analysis Program at UF’s Bureau of Economic and Business Research.
“The increase in consumer confidence is fueled by improvements in Floridians’ expectations about their personal financial situation one year from now and their opinions about whether now is a good time to buy a big-ticket item. These views contrast with the current economic outlook. As inflation is running at a four-decade high, the Fed has approved the largest interest rate increase since 1994 and has indicated that it expects to raise it further this year, increasing the risk of recession,” Sandoval said.
In contrast to Florida, national consumer confidence fell sharply in June.
“Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by year end,” said Lynn Franco, senior director of economic indicators at The Conference Board in Washington.
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Steve Stewart is a senior contributor at The Florida Capital Star.
Photo “Florida State Capitol” by Michael Rivera CC 3.0.
