The US consumer confidence index fell to 120 in March from 132.6 in February, The Conference Board said Tuesday.
Consumer confidence has taken a hit amid the coronavirus pandemic and strict social-distancing measures.
The March number was not as bad as economists expected, but many are calling for more economic distress ahead.
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US consumer confidence crumbled in March as the country grapples with economic fallout due to the coronavirus pandemic.
The Conference Board said in a report released Tuesday that its consumer confidence index fell to 120 in March from 132.6 in February. The report includes results through March 19.
“Consumer confidence declined sharply in March due to a deterioration in the short-term outlook,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs.”
The decline in March is in line with a severe contraction as opposed to a temporary shock, according to Franco. And, further declines are likely to follow, she said.
While the report was dismal, it was not as bad as economists were expecting – the consensus estimate was that the consumer confidence index would fall to 110.
“The survey captures only the start of the lockdown which we expect soon to cover almost the whole country, and a 12.6-point decline in the index is nothing like enough to reflect the hit,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a Tuesday note.
It “could have been worse,” Shepherdson said, adding that consumer confidence is certain to drop further.
The report comes as countries around the world have taken unprecedented action to curb the spread of COVID-19, which has infected 803,00 people and killed 39,000 globally. Entire cities are now on lockdown, closing schools, sending workers home, and banning all “non-essential” business to limit the spread of illness. And, the measures will continue for the time being – on Sunday, President Trump extended federal social-distancing guidelines through April 30.
While the social-distancing measures are what experts say is needed to address the public health concerns, they will come at a steep cost to the economy and likely lead the US into a recession.
Many economists now expect the US is either in a recession or will fall into one in the second quarter. On Monday, Goldman Sachs further slashed expectations, forecasting that the economy will contract by 34% in the second quarter, and that the unemployment rate will spike to 15% before rebounding for a sharp recovery in the third quarter.
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