U.S. consumer sentiment declines sharply due to Covid-19 pandemic

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Covid-19 pandemic

U.S. consumer sentiment just dropped from a near record-high to its lowest level in eight years.

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A new Refinitiv Ipsos survey conducted on March 24-25 finds that U.S. consumer sentiment fell sharply in the past few weeks, in the environment of the COVID-19 pandemic. Additionally, two thirds of adults surveyed say that, compared to six months ago, they are less comfortable making a major purchase like a home or a car (67%) and other household purchases (66%).

Jharonne Martis, Director of Consumer Research at Refinitiv, said, “More U.S. consumers are filing for unemployment due to the coronavirus pandemic. This is causing the overall Refinitiv Ipsos consumer sentiment to decline as consumers worry about their current conditions, employment and financial investments.”

Here are the detailed findings:

With an index score of 46.0, overall consumer confidence this week is almost 15 points lower than it was just a few weeks ago (60.9).
The drop in overall U.S. consumer sentiment is most driven by a decline in confidence about current conditions, the jobs situation and outlook, and the investment climate.
Today, 67% say they are less comfortable making a major purchase, like a home or car, compared to six months ago.
Compared to six months ago, 66% say they are less comfortable making another major purchase now.
Overall Consumer Confidence

With an index score of 46.0, overall consumer confidence this week is almost 15 points lower than it was just a few weeks ago (60.9) (Exhibit 1).

In the 18 years since Ipsos started tracking U.S. consumer confidence, no such precipitous drop had ever been recorded.
Americans’ consumer sentiment has not been this low since January 2012.
The current index is more than six points lower than the historical average of 52.6, but still more than 10 points higher than it was a few months after the 2008 financial crisis.

The Drop in Consumer Confidence

The drop in overall U.S. consumer sentiment is most driven by a decline in confidence about current conditions, the jobs situation and outlook, and the investment climate.

The current, jobs and investment sub-indices all show score drops in the 15 to 18-point range since earlier this month and negative differences of seven to 10 points vs. its average since 2002.
Signaling that Americans remain hopeful, the expectations sub-index (56.0) shows a lesser drop than the other sub-indices (under 8 points) and is “only” about 5 points lower than its historical average.

Major Purchases

Today, 67% say they are less comfortable making a major purchase, like a home or car, compared to six months ago.

This is up 19 points from earlier this month (48%) and the highest it’s been in eight years

U.S. Consumer Sentiment Weighs On Household Purchases

Compared to six months ago, 66% say they are less comfortable making another major purchase now.

This is up 23 points from earlier this month (43%) and the highest …read more

Source:: ValueWalk

      

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