MORNING CONSULT ECONOMIC INTELLIGENCE

Despite Good News About COVID-19 Vaccines, U.S. Consumers Grow Pessimistic About Economy

Updated: November 24, 2020
This chart displays the ICS, a measurement of consumer sentiment. Higher numbers indicate greater confidence.

 

Welcome to Morning Consult’s U.S. consumer confidence dashboard, powered by Economic Intelligence. Every week, this page will update with the latest national data and insights from our economic team. Additionally, state-level data and findings will be updated once a month.

Morning Consult surveys around 6,000 U.S. consumers every day on their views regarding current and future personal financial conditions and business conditions in the country as a whole. The results from those survey interviews are inputted into the Morning Consult Index of Consumer Sentiment (ICS), which rises as consumer confidence increases. In addition to the ICS, our overall measurement for consumer confidence, Morning Consult uses the responses to track consumer sentiment regarding just the current economic conditions (the ICC) and just expectations for future conditions (the ICE).

This is just a small sliver of the economic data we track around the globe every day. Learn more about Economic Intelligence.

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This week's results are based on around 40,000 survey interviews conducted November 11-17, 2020

WEEK AT A GLANCE

Morning Consult economist John Leer pulled out three key insights from the data this week:

KEY TAKEAWAYS

  • U.S. consumers lose confidence in the economy even as vaccine prospects grow. Morning Consult’s daily U.S. Index of Consumer Sentiment reads 86.24 as of Nov. 24, down 2.27 points from the prior week. Notably, consumers’ views of the present and the future both deteriorated over the past week, with the Index of Current Conditions falling 2.58 points to 86.54, and the Index of Consumer Expectations falling 2.08 points to 86.03. The decreases in all three consumer indices during the last half of the month occurred as the number of new daily COVID cases increased, the total number of coronavirus-related deaths passed 250,000 and businesses and school districts across the country shut their doors. In contrast to this negative news, several pharmaceutical companies reported positive developments in their efforts to produce highly-effective vaccines. However, it was the negative news that drove consumers’ views of the economy this past week. Consumers have already started to feel the financial pain, and they expect things to get worse before they get better.
  • The recent downward trend in consumer confidence reflects the significant uncertainty surrounding widespread vaccinations. While news of the vaccines marks a positive development in the fight against COVID-19, the obstacles to achieving herd immunity are great. For example, the vaccine only helps the economy if people en masse get vaccinated. As of Nov. 23, 46% of American adults are unwilling to commit to getting the vaccine once it becomes available. Americans’ views of the economy reflect the high degree of uncertainty surrounding these logistical challenges: “Why should I expect the economy to improve a year from now when so much has to go right between now and then?” There are also signs that the jobs situation weakened in November, and the political fate of a second pandemic relief bill remains uncertain. In the eyes of consumers, it remains premature to discount the near-term economic impact of the ongoing pandemic due to the increased possibility of a vaccine in the future.
  • There’s nothing shortsighted about consumers’ fears of the virus. Most theories of consumers’ views of the future assume some version of rational expectations: Consumers update their views of the future in light of all information available to them without any sort of systematic bias or shortsightedness. If consumers’ expectations are rational, why have consumers not updated their 12-month and five-year expectations to account for the positive developments in the vaccine? While such views may seem shortsighted, they reflect the financial reality facing consumers: If they or their loved ones lose their jobs in the coming months or are unable to pay their bills, there’s no V-shaped recovery waiting for them. The risks posed by the pandemic to consumers’ finances differ from those facing the cash flows of publicly traded companies, which helps explain the divergent responses of consumers and financial markets to news of the vaccine. Furthermore, irrespective of one’s views of the rationality of consumers’ expectations, the fact is that consumer confidence in November significantly decreased, and that change in sentiment is likely to drive down consumer spending through the rest of the year.

 

 

NATIONAL TRENDS

This week, both consumers’ evaluation of current conditions and expectations for the future continue to tick down.

Daily U.S. Consumer Confidence Indices

Reading this data: In order to gauge consumer sentiment, Morning Consult asks five questions relating to personal finances and business conditions in the country as a whole. The results from those five questions are then inputted into these three indices: The ICS is the overall measurement based on the results of all five questions; the ICC reflects consumers’ views of their current personal financial conditions and of current buying conditions for large household goods, and the ICE measures consumers’ expectations of their future personal financial conditions and business conditions in the country as a whole.

 

 

STATE-LEVEL TRACKING

Since the onset of the coronavirus pandemic, consumer confidence has shifted dramatically in all 50 states. However, the precise magnitude and nature of those shifts vary in important ways. This map tracks state-by-state consumer sentiment since the beginning of the year, and it will be updated once a month to reflect the latest data.

Monthly Consumer Confidence Tracking By State
Updated: October 28, 2020

Jan

STATE LEVEL TAKEAWAYS

  • Consumer confidence in October decreased across a larger geographic footprint than it did in September, reflecting the ongoing increases in coronavirus cases across the country. For the month to date in October, 15 of the 50 states recorded a decrease in their ICS, three times as many as in September. The largest monthly percentage decreases in the ICS in October were in Wyoming, South Dakota, Nebraska, Idaho and Louisiana. With the exception of Louisiana, the number of new coronavirus cases is high and accelerating at some of the fastest paces in the country.
  • Confidence across six critical swing states moderately increased in October. The ICS in Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin increased by 1.53% on average over the past month. The increase in Wisconsin is particularly curious since new per capita coronavirus cases are relatively high in that state. In September, the ICS increased by an average of 4.13% across these six states, which says that these consumers in these economies are entering a holding pattern similar to consumers across the country. 
  • A recent analysis of Morning Consult’s ICS among voters who went for President Barack Obama in 2012 and President Donald Trump in 2016 indicates that the economic effects of the pandemic may have lasting political effects. In each of the six swing states Morning Consult tracked — Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin — consumer confidence among Obama-Trump voters started significantly higher than consumer confidence among all registered voters, but that gap narrowed during the pandemic. In other words, the economic outlook of Obama-Trump voters in these six states fell by more than it did across all registered voters. 

"THIS IS THE FUTURE"

Moody’s Analytics Chief Economist Mark Zandi, on Morning Consult Economic Intelligence’s Global Consumer Confidence tracking

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