Morning Consult, (MC), a Washington D.C., based consumer based tracking poll, has just released it’s daily consumer confidence indices that tracks the fallout from the coronavirus on the economy and consumer sentiment. (MC) surveys approximately 7,500 consumers in the US daily.
Consumer Confidence Suffers Significant Daily Loss: Even though stock markets were closed yesterday, consumers continue to reassess the state of the economy and their personal financial condition in light of the coronavirus outbreak and is effect on equity markets. On Sunday morning, MC’s Index of Consumer Sentiment (ICS) was at 112.8, down from 114.8 on February 24, 2020.
Few Historical Precedents to Last Week’s Drubbing: The two point decrease matches the record for the largest decline during a six-day window. Consumers experienced a similarly rapid decrease in confidence from August 13 – 18, 2019 when US-China trade tensions prompted the bond market to flash signs of a looming recession.
Self-fulfilling Expectations Pose Real Economic Risks: Consumers increasingly expect the economy to get worse. MC’s ICE fell 2.5 points since February 24 and currently stands at 112.9. The fear for policy makers is that the slide in consumers’future expectations become a self-fulfilling prophecy. As more consumers expect the economy to contract in the coming months, they become more likely to delay discretionary purchases, which in turn drives down aggregate US demand.
Morning Consult is issuing a daily report on the effect of the coronavirus during this period of market instability.