US consumer sentiment falls for the first time in 4 months as spiking COVID-19 cases spur worry

APShoppers walks past a sign encouraging masks at SouthPark Mall, Wednesday, May 13, 2020, in Strongsville, Ohio.
  • The University of Michigan’s consumer sentiment index fell to 77 in a preliminary November reading from 81.8, marking its first decline in four months and hitting its lowest point since August.
  • Economists surveyed by Bloomberg expected a reading of 82.
  • The university’s gauge of consumer expectations plunged to 71.3 from 79.2 as soaring COVID-19 cases and the US presidential election weighed on recovery hopes.
  • While President-elect Joe Biden’s victory did little to boost Democrats’ outlooks, Republicans’ expectations for the economy fell to their lowest since President Donald Trump took office.
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Americans are turning pessimistic about the economy for the first time in months as coronavirus cases repeatedly hit new records.

The University of Michigan’s index of consumer sentiment fell to 77 in a preliminary November reading from 81.8, marking its first decline in four months. Economists surveyed by Bloomberg expected the gauge to edge higher to 82. Friday’s reading is also the index’s lowest since August.

The university’s index of consumer expectations sank to 71.3 from 79.2, also hitting its lowest in three months. Much of the decline came from a dive in expectations among Republicans following the early November elections. Democrats’ expectations for the economy were little changed despite President-elect Joe Biden winning the presidential race.


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“It is likely that Democrats’ fears about the covid resurgence offset gains in economic expectations,” Richard Curtin, chief economist for the university’s surveys of consumers, said in a statement.

Republicans now hold their most pessimistic expectations for the economy since President Donald Trump took office, and Democrats are the most positive they have been in years. The partisan gap will likely widen, but “gains will be limited” until a viable COVID-19 vaccine is approved and distributed, Curtin said.

The drop in consumer sentiment comes at a critical junction for the US economy. The all-important holiday shopping season is approaching, yet new coronavirus cases continue to spike higher across the country. A prolonged virus resurgence would curb Americans’ spending and drastically slow the nation’s economic rebound.

The university’s final November reading will be released on November 25 at 10 a.m. ET.


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