Economy

Consumer Sentiment Slides as Worries Mount Over Coronavirus

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The Morning Consult index of consumer sentiment fell slightly, dipping from 115.3 to 114.8 in the week ending February 23. That keeps the index near record highs.

The index is based on the firm’s daily survey of some 7,500 U.S. adults and is significantly higher than it was at this time last year. The 52-week low of 107.0 was posted on August 26, 2019, and the 52-week high was posted during the week ended February 9.

The gap between the index’s component scores narrowed again last week, with the future expectations score slipping by 0.8 points to 115.3 and the current conditions score dipping 0.3 points to 114.0.

According to Morning Consult, “Consumers are most concerned about future economic performance, particularly U.S. businesses. … The dip was particularly pronounced among those who work in the financial and transportation sectors … As previously reported, U.S. consumers primarily view the coronavirus as a risk to global economic growth, [rather] than a risk to U.S. economic growth and finally as a risk to economic growth in their local economies. This week’s data is consistent with those findings. The coronavirus has yet to affect U.S. job or wage growth and consumers’ views of their personal financial conditions remained essentially unchanged.”

Morning Consult asks the same questions of its survey respondents as does the University of Michigan’s twice-monthly Survey of Consumers. The difference is in the number and method of the survey. The Michigan sentiment index is based on 600 telephone interviews with U.S. adults while Morning Consult’s results are based on an ongoing survey comprising 7,500 daily interviews and 210,000 monthly interviews, all conducted online.

The survey breaks down the data it collects by some key demographic groups. Here are some of the results of that breakdown.

Households with income of less than $50,000 annually posted an overall sentiment score of 108.3 last week, down 0.7 points from the previous week. Among households with income between $150,000 and $200,000, the overall score fell by 1.3 points to 127.5, while overall sentiment among households with incomes between $200,000 and $250,000 dipped by 3.3 index points to post a score of 124.8. Households with incomes over $250,000 saw an increase of 1.4 index points to 133.7.

By industry sector, Americans employed in the transportation sector posted a drop of 4.9 points in overall confidence. For Americans employed in the financial activities sector, the 127.3 reading was after a decline of 4.7 points last week.

Overall sentiment in the agriculture industry rose last week, adding 2.4 points to raise the industry’s index reading to 127.5.

Top executives in businesses of all sizes showed a 0.6-point gain in overall sentiment last week, raising the index score to 126.8. Executives from businesses with 21 to 100 employees registered a 1.8-point drop in overall sentiment, posting an index score of 136.7 while top executives of companies with more than 100 employees posted a decline of 6.4 points to lower their index score to 149.5.

Looking at responses to questions about future economic conditions, top executives of companies with more than 100 employees posted an index score of 147.6, down by 8.2 points week over week. At companies with one to five employees, executives increased the score by 1.4 points to 123.5.

Company executives’ opinion of current economic conditions rose by 0.9 points last week, with the index score rising to 125.1. CEOs of companies with between 21 and 100 employees were the most pessimistic, dropping their index score by 6.6 points to 136.5.

The final February consumer sentiment index from the University of Michigan is due out on Friday. Economists are expecting the index to remain flat with the January score of 100.9.

The world’s largest company, Apple Inc. (NASDAQ: AAPL), last week said it wouldn’t meet its quarterly revenue projections due to problems with its iPhone supply chain. Those problems are likely due to the outbreak of coronavirus in China.

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