April US Consumer Sentiment Plummets to 50-Year Low on COVID-19 Fears
The University of Michigan Consumer Sentiment Index plunged month over month from a March reading of 89.1 to April’s final level of 71.8. When the preliminary April index score was reported earlier this month, the index reflected a decrease to 71.0. Economists polled by Bloomberg were expecting a final April reading of 68.0.
The final index reading in April of last year was 97.2. Month over month, consumer sentiment declined by 17.3 index points, the largest one-month drop in nearly 50 years. The percentage drop in the index month over month was 19.4%, and the year-over-year drop was 26.1%.
Month over month, the consumer expectations subindex tumbled 9.6 points, from 79.7 to 70.1 (down 12.0%), while the current conditions subindex decreased from 103.7 to 74.3 (down 28.4%).
Year over year, the current conditions subindex fell by 33.8% and the consumer expectations subindex retreated 19.8%.
The survey’s chief economist, Richard Curtin, noted, “In the weeks ahead, as several states reopen their economies, more information will reach consumers about how reopening could cause a resurgence in coronavirus infections. Consumers’ reactions to relaxing restrictions will be critical, either putting further pressure on states to reopen their economies, or exerting added pressure to extend the restrictions even if it has negative consequences for economic prospects. The risks associated with these decisions are not equally balanced, with an incorrect decision to reopen having serious repercussions. The necessity to reimpose restrictions could cause a deeper and more lasting pessimism across all consumers, even those in states that did not relax their restrictions.”
Nearly three-quarters of Americans now trust Dr. Anthony Fauci and the Centers for Disease Control and Prevention (CDC) to provide the best information on when the social distancing rules can be lifted.
The COVID-19 outbreak in the United States continues spreading, with more than 2,900 new cases reported as of Friday morning, bringing the nation’s total number of cases to nearly 890,000. The disease is also spreading faster in some states than in others.