Conference Board’s Measure Echoes Michigan Sentiment
The Conference Board’s US consumer confidence index fell in March to a reading of 120.0 from 132.6 in February, another indication that COVID-19 had severely impacted the psyche of consumers in just a few weeks, the Conference Board reported Tuesday.
The report, based on a sample through March 19, follows a decline in the final Michigan Sentiment index released on Friday, which showed a significant downward revision in confidence toward the end of the month.
The impact on the public consciousness started off slowly in the month, as suggested by the preliminary Michigan reading, but accelerated quickly as the Federal Government and (gradually) all the states moved to more aggressive measures to deal with the disease.
The constant updates to total confirmed cases and deaths from the virus provide no reprieve from reality.
Lynn Franco, the Conference Board’s senior director of Economic Indicators, said that “the intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs. 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 reading of present situation fell to 167.7 from 169.3, while the expectations reading plunged to 88.2 from 108.1, suggesting that consumers do not see a clear end in sight for the virus impact.
Survey respondents were less optimistic about both business conditions and employment opportunities in March. The percentage of respondents describing business conditions as “bad” rose to 11.4% from 10.8% in February. Respondents looking for business conditions to worsen over the next six months rose to 14.9% from 7.2% in February.
Those reporting jobs were plentiful fell to 44.9% from 46.5%, while those reporting that they are “hard to get” was unchanged at 13.9%.
The gap between the two jobs measures, a closely watched indicator of employment conditions, fell to 31.0 in March from 32.6 in February, supporting forecasts that expect March payrolls will be roughly unchanged before a sharp April decline.
Respondents see the job market deteriorating further. Those expecting fewer jobs in the coming months rose to 17.1% from 12.0% in February.
In other economic data Tuesday:
The US March Dallas Fed services general business index plunged to a record low reading of -78.8 from +7.0 in February, echoing declines in other regional services data. There were sharp declines in all of the components and the six-month outlook fell to -50.4 from 12.0. As with Monday’s manufacturing index, the Dallas Fed said respondents see considerable uncertainty and negative effects going forward from the virus. The regional data support forecasts for a decline in the national nonmanufacturing ISM data to be released on Friday.
The US January Case-Shiller seasonally adjusted 20-city home price index was up 0.3% (+0.4% expected, +3.1% NSA y/y), preceding the COVID-19 epidemic.
The US March Chicago PMI fell slightly to 47.8 (40.0 expected) from 49.0 in February, the final regional data released before Wednesday’s national ISM data. The national index is expected to decline to 43.5 from 50.1 in February, indicating outright contraction. Nearly all of the regional data declined in the month, with the exception of a modest gain in the Richmond Index.