Disruptions to business activity and an array of normal life routines from watching a movie in the theater to dining out because of the global COVID-19 pandemic has had adverse affects on a widely monitored economic index.
The Conference Board’s April Consumer Confidence Index stood at 86.9, down from 118.8 in March. Experts typically view a score of 100 or better as consumers having an optimistic view on the economy. However as some states, including Indiana, announced plans to begin gradually reopening businesses and easing restrictions on public interaction, the Conference Board’s Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – improved from 86.8 in March to 93.8 in April.
“Consumer confidence weakened significantly in April, driven by a severe deterioration in current conditions,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Consumers’ short-term expectations for the economy and labor market improved, likely prompted by the possibility that stay-at-home restrictions will loosen soon, along with a re-opening of the economy.”
Results of the index fell in line with recent government data, which found the U.S. economy shrank 4.8% between January and March primarily due to reduced business activity fed by the crisis.
Franco said her organization’s research also found consumers were less optimistic about their financial prospects, which may impact spending as the world begins to recover.
“The uncertainty of the economic effects of COVID-19 will likely cause expectations to fluctuate in the months ahead,” Franco said.
The monthly Consumer Confidence Survey is based on a probability-design random sample, which is conducted by Nielsen, a provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was April 17.
The Conference Board said consumers showed some optimism about the short-term outlook. The percentage of consumers expecting business conditions will improve over the next six months increased from 18.7% in March to 40% in April.
However, there also growing pessimism about the economy. The Conference Board said consumers expecting business conditions to worsen increased, from 16.4% to 25.7%.
Consumers’ outlook for the labor market was mixed, The Conference Board said. The proportion expecting more jobs rose from 16.9% to 41%, while those anticipating fewer jobs in the months ahead also increased, from 17.6% to 20.8%.
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