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Consumer Confidence: Less Decline Than Expected Amid Virus

March 31, 2020

Bottom Line: Consumers' assessments of the economy were sharply lower amid the novel coronavirus shutdowns. Surprisingly, the present situation index barely moved lower. Expectations, though, fell sharply, suggesting many consumers are worried about their future prospects even if their current situation is stable. Survey sampling was increasingly difficult prior to this shock, and the virus shutdown likely changed the mix of people who were willing to respond to a survey -- those who still have landlines, for instance, might be home to answer it during the business day, for instance. Geographic location likely played a major factor too given the timing of this survey. Thus, we don't want to read too much into the nuances of the survey -- consumers' expectations for the future deteriorated and were headed lower amid unprecedented uncertainty.

Consumer Confidence FELL by 12.6 points in March to 120.0, compared with market expectations for a decline to 110.0. The index is now 3.4% BELOW its year-ago level.

Present Situation Index FELL by 1.6 points to 167.7. The index is 2.9% ABOVE its year-ago level.

The Expectations Index FELL by 19.9 points to 88.2. The index is 10.3% BELOW its year-ago level.

The labor differential, the percentage of respondents who said jobs are “hard to get” from the percentage who said jobs are “plentiful” , moved lower by 1.6 points to 31.0.

Article by Contingent Macro Advisors