Consumer confidence lackluster as the pandemic continues
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Consumer confidence drives consumer spending, which is two-thirds of U.S. gross domestic product. And lately, consumers haven’t been feeling a lot of good vibes about the economy.
The University of Michigan’s index of consumer sentiment slipped up slightly for December, but remained higher than last month despite the recent surge in COVID infections and deaths. The Conference Board’s confidence index fell in December, back to levels last seen in the summer. Other key indicators of consumer behavior like willingness to go out to shop or eat are in the doldrums as well, as the pandemic rages on.
Even with positive news about vaccinations, most of the news about the economy and COVID-spread has been downbeat lately, said Robert Frick at Navy Federal Credit Union.
How consumers feel about the future depends a lot on how pandemic shutdowns and layoffs have affected them, said Mark Hamrick at Bankrate.
“There are a lot of people who are doing just fine, who’ve been able to work from home,” Hamrick said. “They may own their home, they have substantial assets.”
Those folks are not overly worried about the future. Other workers are more anxious.
“Those who have really been on the front lines of these industries hurt most in the pandemic — leisure and hospitality, retail,” Hamrick said. “And they are more financially fragile.”
Hamrick said a recent Bankrate survey found that half of American households have lost income in the pandemic.
COVID-19 Economy FAQs
With a slow vaccine rollout so far, how has the government changed its approach?
On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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