- The Conference Board’s gauge of U.S. consumer confidence plunged from 132.6 to 120 in March, while economists expected a 110 number.
- Confidence is likely to decline further in the coming months.
- It will probably take a long time before consumers start spending like before the crisis.
The Conference Board said Tuesday its consumer confidence index dropped to 120 in March from 132.6 in February, its lowest level in three years. The decline wasn’t as severe as expected, as economists polled by Dow Jones forecast 110.
Is this a good sign? Unlikely.
Consumer Confidence Likely To Decline Further
The survey period covered Mar. 1-18, when consumers began worrying about the coronavirus.
The impact of coronavirus is just starting to show in the numbers. Things could be getting much worse in the coming months. The decline is just evidence of how much economic pain still waits on the horizon. Economists believe consumer confidence will likely decline further as the impact of the virus weighs more on the economy.
Lynn Franco, Senior Director of Economic Indicators at The Conference Board, said:
Consumer confidence declined sharply in March due to a deterioration in the short-term outlook. The intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs. March’s decline in confidence is more in line with a severe contraction – rather than a temporary shock – and further declines are sure to follow.
Data from John Hopkins University showsthat more than 800,000 cases of COVID-19 have been confirmed globally. About 164,000 are in the U.S.
Countries, including the U.S., have taken measures to contain the spread of the virus. But those actions have slowed down the economy.
Goldman Sachs significantly downgraded its outlook for the U.S. economy between April and June….