Consumer confidence dips with spread of COVID-19
Consumer confidence steeply declined over the past month, the fourth biggest one-month drop in nearly 50 years, as the novel coronavirus spread and the United States reacted with social disruptions and shut-downs across sectors.
Sentiment dropped 11.9 index points in March, from 101.0 to 89.1, according to the University of Michigan. Confidence is likely to get a lot worse, and could reach levels last seen in the Great Recession.
Richard Curtin, chief economist on Michigan’s survey, wrote “stabilizing confidence at its month’s end level will be difficult given surging unemployment and falling household incomes.”
Early this year, consumer confidence was nearly the highest it’s been in a decade. Then COVID-19 hit.
“When all of these sporting events were cancelled and there was news of different celebrities contracting the virus, consumers turned extremely pessimistic,” said John Leer at Morning Consult.
Leer says Morning Consult’s survey show confidence is down 24% in the past month. Some of that’s from all the job losses. And Leer says people increasingly fear for their financial security.
“Roughly 50% of U.S. households own stocks, so when the stock market falls, that’s hitting their retirements directly,” Leer said.
The Fed and Congress plan to inject trillions into the economy, and Mark Hamrick, senior economic analyst at Bankrate, says that’ll buck up consumers.
On the flip side: “If we see a substantial number of storefronts that are shuttered that’s going to undermine our sentiment,” Hamrick said.
He says keeping employers afloat until they can start hiring again is key to an eventual consumer rebound.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.