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
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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