KEY TAKEAWAYS:
- Consumer sentiment fell 5 percent from 101.0 in February to 95.9 in March as concerns about COVID-19 grow.
- This decline is slightly below market expectations, which expected a decline to 95.0 in March’s preliminary reading.
- The largest contributing factor to the decline was the sub-component about the year ahead, which fell 29 points and accounted for 83 percent of the total decline in the index.
- Individuals surveyed viewed the economic outlook over the next five years far more favorably.
ECONOMIST CORNER:
March’s decline in consumer sentiment was expected following this week’s stock market rout and news about the spread of COVID-19. However, the survey released by the University of Michigan notes that consumers widely regard the pandemic as a “temporary event” and that it has not generated panic equivalent to that prior to the great recession. Even so, “additional declines in confidence are still likely to occur as the spread of the virus continues to accelerate.” These declines in consumer sentiment could be alleviated with strong policy action from Congress, which is currently negotiating a package with the White House to address COVID-19.