The burden of the coronavirus isn’t getting any lighter.
As the supply chain scrambles to restock certain items in bulk and customers are afraid to leave their houses for all but the essentials, the US economy is straining to stay afloat. That strain is no secret, unfortunately, and as a result, consumer sentiment has reached record lows.
The consumer sentiment index dropped to 89.1 in March, which is the lowest it has gone since October of 2016. That’s a 12.1-point drop from February’s index of 101. Economists were predicting a drop to a flat 90, which shows that even their expectations of the damage caused by the coronavirus have been defied.
According to Richard Curtin, chief economist for the Surveys of Consumers, March’s drop is the fourth largest decline in consumer sentiment in the last 50 years. “The extent of additional declines in April will depend on the success in curtailing the spread of the virus and how quickly households receive funds to relieve their financial hardships,” Curtin explained.
As the US surpasses China and Italy in the number of confirmed COVID-19 cases, more businesses continue to shutter, which in turn costs more citizens their jobs. A record number of filings for unemployment were sent in over the last week, with a higher concentration in California and New York. Despite the passing of the $2 trillion stimulus package earlier in the week, the future still looks too foggy.
“Mitigating the negative impacts on health and finances may curb rising pessimism, but it will not produce optimism,” Curtin cautioned. “There is no silver bullet that could end the pandemic as suddenly as the military victory that ended the Gulf war.”