The Latest Consumer Confidence Index and What Lies Ahead (?)

By at 30 June, 2020, 10:37 pm

by Raymond J. Keating-

On June 30, the Conference Board reported that its Consumer Confidence Index increased in June, although its remains well below pre-pandemic levels.

The Index increased from 85.9 in May to 98.1 in June. That’s a notable move, but consider that the pre-pandemic level in February was 132.6.

The Conference Board reported, “The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – improved from 68.4 to 86.2. The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – increased from 97.6 in May to 106.0 this month.”

Lynn Franco, Senior Director of Economic Indicators at The Conference Board, struck a distinct note of caution:

“The re-opening of the economy and relative improvement in unemployment claims helped improve consumers’ assessment of current conditions, but the Present Situation Index suggests that economic conditions remain weak. Looking ahead, consumers are less pessimistic about the short-term outlook, but do not foresee a significant pickup in economic activity. Faced with an uncertain and uneven path to recovery, and a potential COVID-19 resurgence, it’s too soon to say that consumers have turned the corner and are ready to begin spending at pre-pandemic levels.”

Such caution, of course, is wise, due to the recent move upward on COVID-19 cases in the U.S. overall – especially in states such as Arizona, Florida and Texas (see, for example, a Washington Post update on this front). With data updated on June 29, the CDC reported a one-day increase of 41,075 in new coronavirus cases (with the total at 2,545,250) and deaths up by 885 (for a total of 126,369).

In turn, one has to wonder what that will mean for both government and business plans on reopening. The resurgence in cases imposes additional uncertainties on an economy struggling to regain footing, and start climbing out of a deep hole. Business owners need to remain on top of these numbers and trends in an attempt to stay ahead of matters and make informed decisions regarding their enterprises.

A grim scenario – but one that must be taken as a serious possibility – is that an assumed economic bottom being hit in April either wasn’t a bottom, or it doesn’t preclude another move down. A so-called V-shaped recovery seems remote, while we all need to be on guard for a double or triple-dip downturn in these unprecedented times.

To say that these are delicate, uncertain times on both the health and economic fronts is to simply remind people of what is obvious in a wide range of data.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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