Consumer sentiment tumbled 11.9 index points in March, the fourth-largest one-month decline in nearly a half century, according to the University of Michigan Surveys of Consumers out Friday.
The Consumer Sentiment Index fell to 89.1 in the March 2020 survey, down from 101.0 in February and 98.4 in last March’s survey. The Expectations Index fell to 79.7 in March, down from 92.1 in February and 88.8 in last March’s survey. The Current Conditions Index fell to 103.7 in March, down from 114.8 in February and last March’s 113.3.
The decline in confidence accelerated during the month of March, with the seven-day average at the end of the month considerably weaker.
Even if the data showed no further deterioration, the size of the April decline would be even larger than March, and amount to the largest two-month decline in the Sentiment Index ever recorded, said U-M economist Richard Curtin, director of the surveys. While the data indicate that the economy is already in recession, the data also suggest that the economic downturn could persist at least until the end of the year.
“The extent of declines in consumer spending in the months ahead will depend on the success in curtailing the spread of the virus and how quickly households receive funds to relieve their financial hardships,” Curtin said. “Mitigating the negative impacts on health and finances may curb rising pessimism, but it will not produce optimism."
