The top indices used by The Conference Board, Inc. to gauge U.S. consumer confidence all plummeted sharply in March due to the massive economic hit taken by the economy from the COVID-19 crisis. Conference Board publishes widely-followed monthly economic indicators about business and consumers in the United States.
The Conference Board's monthly Consumer Confidence Index fell sharply in March following an increase in February. It now stands at 120.0 (1985=100), down from 132.6 in February. The Present Situation Index (which is based on consumers' assessment of current business and labor market conditions) dropped to 167.7 from 169.3. The Expectations Index tumbled to 88.2 in March from 108.1 in February. This index is based on consumers' short-term outlook for income, business and labor market conditions.
"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 Present Situation Index remained relatively strong, reflective of an economy that was on solid footing, and prior to the recent surge in unemployment claims. However, the intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs. March's decline in confidence is more in line with a severe contraction -- rather than a temporary shock -- and further declines are sure to follow."
The Consumer Confidence Index revealed the percentage of consumers claiming business conditions are "bad" increased to 11.4% from 10.8% while those saying it was "good" was relatively unchanged at 39.6 %. Consumers' assessment of the job market was more pessimistic in March compared to February. Those saying jobs are "plentiful" decreased to 44.9% from 46.5% while those saying jobs are "hard to get" was unchanged at 13.9%.
Consumers were significantly less optimistic about the short-term outlook. There was also pessimism on the future business outlook with the percentage of consumers expecting business conditions to improve over the next six months dropping to 18.2% from 20.6%. Those expecting business conditions will worsen increased to 14.9% from 7.2%.
Consumers' outlook for the labor market was equally dim. Those expecting more jobs dropped to 15.5% from 16.6%, while those anticipating fewer jobs in the months ahead increased to 17.1% from 12.0%. The percentage of consumers expecting short-term income prospects fell to 20.7% from 22.7%. Those expecting a decrease rose to 8.8% from 6.1%.
"The survey captures only the start of the lockdown, which we expect soon to cover almost the whole country," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "This is another number certain to drop further."
Dan North, chief economist for North America at Euler Hermes, explained the consumer confidence survey was taken before the U.S. got the really massive layoffs. He predicts the survey to plummet in April.
