Consumer confidence has fallen — again.
This is the latest gauge of American consumer attitudes taken by The Conference Board think tank. For August, its Consumer Confidence Index came in at 84.8 — below expectations and down from 91.7 in July. It was down quite a lot from June — 98.3 — when there was a fair amount of optimism building among consumers as the economy reopened and some folks were called back to work.
But the summer surge in COVID-19, states pausing their reopenings, schools starting virtually and gridlock in Washington over extending unemployment benefits — it’s all taking a toll on the American consumer.
Economist Lynn Franco at The Conference Board said consumers are getting more pessimistic about their economic situation.
“That cloud of uncertainty seems to be covering the majority of consumers,” Franco said. “There’s not much of an expectation that business conditions or employment are going to improve, and we’ve actually seen consumers grow a little bit more negative about their financial well-being.”
Consumers are still hesitant to return to their favorite pre-pandemic places and pastimes to spend money. Joanna Piacenza at polling firm Morning Consult said that’s largely due to the mid-summer spike in COVID-19 cases.
“Consumer comfort with doing these activities — going to the movies, going to the gym, going to a concert — that dropped down roughly one-third. And it hasn’t budged since,” Piacenza said. “It’s been about nine weeks of no movement.”
That fits the experience of 26-year-old Jessica Montoya of Portland, Oregon. She was picking up a takeout breakfast this morning near the open-air fruit stand where she works. I asked how she feels about dining in.
“Not entirely comfortable yet,” she said. She’s done it once since local COVID-19 restrictions were lifted in June.
“You wear your mask to go sit down, but it seems like after that you’re just not wearing the mask,” Montoya said. “So in my head, it somewhat defeats the purpose.”
Morning Consult found the number of consumers who feel comfortable dining out at restaurants has fallen 10 points since May to just 31%.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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