Amid Coronavirus Crisis, Finance, Transport Sectors See Dip in Consumer Expectations

As coronavirus continues to spread outside of China, U.S. consumer confidence has overall remained buoyant, despite volatility in financial markets, according to Morning Consult Economic Intelligence. 

In some sectors, however, future expectations for the economy went down marginally. The index, which can be volatile with small sample sizes, declined 4.9 points among transportation workers and 4.7 points in the finance industry over the week. 

Morning Consult’s Index of Consumer Expectations edged down 0.8 points last week to 115.3, led by drops in the financial and transportation sectors. 

Overall, however, economic expectations among workers in these two industries has remained relatively steady (transportation) and has risen (finance) since the onset of the coronavirus outbreak in late December. There was only a slight dip in the four-week moving average in the last week, and overall expectations in those sectors remain historically high. 

The Index of Consumer Sentiment, a broader metric, dropped 0.6 points to 114.8, close to where it began the year. The drop represented less than half the week-over-week decline that occurred in early January at the peak of the U.S.-Iran conflict.

Because the latest Morning Consult data covers the week ending Feb. 23, it doesn’t reflect any changes in consumer sentiment that might have resulted from the sharp drops in U.S. financial markets Monday and Tuesday or take into account the Centers for Disease Control and Prevention’s announcement that it expects coronavirus to spread in the United States.  

“Over the long run, daily consumer confidence and the S&P are highly correlated,” said John Leer, senior director for Morning Consult Economic Intelligence. “Recent declines in the stock market are likely to exert downward pressure on consumer confidence.” 

At the same time, the intensifying coronavirus outbreak has contributed to volatility in U.S. stock markets as investors consider supply chain disruptions and their wider effect on the global economy. 

Morning Consult’s aggregate indices are based on daily surveys of 7,500 U.S. adults. Morning Consult Economic Intelligence data draws upon surveys that ask each respondent the same five questions as the University of Michigan’s Surveys of Consumers. (A detailed explanation of the methodology can be found here.)