The U.S. consumer confidence index plunged to a three-year low in March as more and more Americans holed up in their homes to try and combat the spread of the novel coronavirus pandemic that is sweeping the globe.
The COVID-19 outbreak began in Wuhan, China, but the U.S. officially has more cases than any other country, prompting some states, like New York and California, to go on lockdown.
According to the Center of Disease Control’s report Monday, there are 163,539 cases of COVID-19 in the U.S., and there have been 2,860 deaths so far.
All 50 states, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands and the U.S. Virgin Islands have all reported cases.
The outbreak has caused American consumer confidence about the short-term fate of the U.S. economy to plummet, the Conference Board said Tuesday.
Consumer Confidence Index
The consumer confidence index fell to a reading of 120.0 this month, its lowest rating since July 2017. Though, economists polled by Reuters expected the number to be even lower at 110.0.
February’s reading was revised slightly upward to 132.6 after first coming in at 130.7.
The Conference Board of course expects further declines amid the pandemic fallout as the respiratory illness more specifically known as COVID-19 continues to spread and intensify.
“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 Board Economic Indicators Senior Director Lynn Franco said in a statement.
The survey comes after Department of Labor said last week the number of Americans filing for unemployment soared to a record high 3.3 million for the week ending March 21 while business activity fell to an all-time low in March.
The Conference Board survey’s present situation measure, which is based on consumers’ assessment of ongoing business and labor market conditions, also dropped from 169.3 in February to 167.7 this month.
MUFG chief economist Chris Rupkey said the consumer confidence index will continue to drop, and things will be worse than they were amid the 2008 great financial crisis.
“The consumer confidence index is likely to continue to fall as the hit to the economy is going to be even harder than it was in the Great Recession over a decade ago,” Rupkey said. “We are starting to lose confidence ourselves that the economy can be restarted as easily as government officials are saying as the expected length of the coronavirus shutdown grows ever longer.”