Florida is currently grappling with a distinctive inflation issue, characterized by a higher inflation rate compared to the national average. This situation is primarily driven by the exorbitant cost of housing, which has remained at a double-digit level in Florida.<\/p>\n\n\n\n
Since 2015\/2016, the state has been plagued by a housing shortage, exacerbated further by the decrease in mortgage rates to below 3%. Moreover, the rapid population growth in Florida has intensified the housing scarcity. Consequently, unless there is a substantial increase in housing inventory, it is likely that Florida’s inflation rate will continue to exceed the national average.<\/p>\n\n\n\n
Additionally, there has been a noteworthy shift in consumer spending patterns in Central Florida. Consumers are now favoring experiential purchases over goods and services due to pent-up demand resulting from pandemic-related restrictions. This shift has led to a decline in consumer spending on items such as furniture, while credit card balances have reached record levels.<\/p>\n\n\n\n
Furthermore, the state’s labor market remains robust, characterized by low unemployment rates and wage growth of 4.4%. However, real wages and salaries have experienced a decline due to inflation. It is important to note that strong wage growth can put upward pressure on prices.<\/p>\n\n\n\n
Given these circumstances, the Federal Reserve is expected to raise interest rates in an effort to curb inflation without triggering a recession. The data on inflation supports the notion of halting rate hikes, necessitating the central bank to maintain the current interest rates to ensure a decline in inflation that is both sustainable and long-lasting.<\/p>\n\n\n\n