Consumer Confidence Slides as COVID-19 Surges
US consumer confidence dropped in December in response to a faltering economy and a rise in deaths and new cases of COVID-19.
The Conference Board reported a December 2020 Consumer Confidence Index of 88.6, a fall of more than four percentage points from November’s 92.9 rating.
The Conference Board is an economic research company that publishes monthly reports on public optimism. Its Consumer Confidence Index, based on a survey of 5,000 households, has been published since 1967. The figures often influence stock market fluctuations and factor into decisions of the Federal Reserve.
The coronavirus pandemic is responsible for 18.3 million infections and more than 323,000 deaths in the United States. It has led to high unemployment, reduced revenues in many industries, and economic struggles for families and small businesses as restrictions imposed by state and local governments reduce consumer spending.
Although an 88.6 rating suggests that consumers lack confidence in a speedy recovery, it is nowhere near February 2009’s rating of 25, which came during a global financial crisis.
The Conference Board says 29% of consumers believe the economy will improve over the next six months – an increase from the 26.5% recorded in November. Nonetheless, consumers believe the overall outlook is bleak.
“Consumers’ assessment of current conditions deteriorated sharply in December, as the resurgence of COVID-19 remains a drag on confidence,” said Lynn Franco, the Conference Board’s senior director of economic indicators. “Overall, it appears that growth has weakened further in Q4, and consumers do not foresee the economy gaining any significant momentum in early 2021.”