Hopes for a swift economic recovery recede

Partisanship key predictor of consumer sentiment

The author(s)

  • Nicolas Boyon Senior Vice President, US, Public Affairs
  • Catherine Morris Data Journalist, US, Public Affairs
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Visit our interactive portal, Ipsos Consolidated Economic Indicators (IpsosGlobalIndicators.com) for graphic comparisons and trended data pertaining to the Ipsos Global Consumer Confidence Index and  sub-indices -- and all the questions on which they are based.


Washington, DC, June 4, 2020 — As all 50 states reopen for business and protests grip the nation, Ipsos’ Consumer Confidence index dropped by nearly 1 point to 48.4 after reaching its highest point since early March last week.

Americans are divided on whether they believe the economy will recover quickly once the lockdown is over, though a majority now say that they expect the recovery will be slow. The nation is increasingly in favor of restarting the economy even if the virus is still not fully contained. Partisanship is the strongest predictor of consumer sentiment, with Republicans reporting the most confidence on all sub-indices.

Other findings from Ipsos’ survey of nearly 1,000 U.S. adults conducted June 2-3 suggest that rising optimism may be tempered by certain realities, particularly around job security and how fast the economy will bounce back once restrictions are lifted.

Detailed Findings

1. Scoring at 48.4, the latest overall Consumer Confidence index is now three points higher than it was during the first two weeks of April, when it hit its lowest point since the beginning of the coronavirus pandemic.

  • The Confidence index is 15 points lower than it was at the beginning of the year (63.4), 11.7 points lower than in early March (60.1) and four points lower than its historical average of 52.3.
  • Pre-pandemic, October 2013 is the last time when the Confidence index was this low. The index is currently 13.2 points higher than its historical low of 35.2 in March 2009.

Consumer Confidence

2. Partisanship is the key predictor of consumer sentiment, with Republicans reporting the highest levels of consumer confidence on each of the sub-indices.

  • Republicans diverge most from Democrats and Independents on their outlook around their financial situation and that of their community.
  • In addition to Republicans, affluent, retired and Southern Americans are among the more confident demographics, while Democrats, Independents, Western and unemployed Americans are the least confident.

Sub-indices

3.The Current index, indicative of sentiment about today's economic environment; the Expectations index, indicative of Americans' outlook about their financial situations, local economy and employment; and the Investment index all took a small step back from the past week. 

  • The Current index reversed the gains of last week (-2) while the Jobs index stayed essentially level (+0.5).
  • Both the Expectations index and the Investment index show a marginal decline vs. last week (-1 point).

Sub-indices.2

4.This week’s Jobs index continues to reflect renewed optimism around employment, sustained over the past two weeks as states lift restrictions and enable some economic activity to resume, though signs of worry about job security are still present.

  • 40% say they, someone in their family, or someone else they know personally lost their job in the last six months as a result of economic conditions, down from 48% two weeks ago.
  • Only 18% say it’s extremely or very likely that it will be the case in the next six months (down from 29% in late March-early April and close to the early March level of 14%).
  • However, confidence in job security dropped 3 points as 35% say they are more confident than six months ago about job security, compared to 38% last week, which was the highest since early March.

5. As has been the case for several weeks, Americans are divided on the question of whether the economy will recover quickly once the lockdown ends (45% agree, 50% disagree). In a reversal of the preceding week, those who do not think the economy will rebound quickly are now the majority. 
Recover quickly

6. Americans are increasingly on the side of restarting the economy even if the virus is not fully contained. Just over half of Americans (53%) favor starting the economy up again, compared to just over one third a month ago.

  • Those who disagree (44%) declined 2 points from the previous week. Considerable partisan differences on this question remain.

Restart the economy

7. Americans are once again growing less comfortable about making major purchases again, reversing trends of the preceding two weeks. Their views on making household purchases have not changed.

  • Compared to six months ago, 70% say they are less comfortable making a major purchase like a home or a car, up from 62% last week and 68% the week before.

Major Purchase

  • Compared to six months ago, 61% say they are less comfortable making other household purchases, statistically the same as 61% last week, but down from 68% in the second week of May.

 Other Purchase

 

 


Questions

The data used for the Consumer Confidence index and sub-indices is based on the following questions:

 

  1. Now, thinking about our economic situation, how would you describe the current economic situation in US? Is it… very good, somewhat good, somewhat bad or very bad?
  2. Rate the current state of the economy in your local area using a scale from 1 to 7, where 7 means a very strong economy today and 1 means a very weak economy.
  3. Looking ahead six months from now, do you expect the economy in your local area to be much stronger, somewhat stronger, about the same, somewhat weaker, or much weaker than it is now?
  4. Rate your current financial situation, using a scale from 1 to 7, where 7 means your personal financial situation is very strong today and 1 means it is very weak
  5. Looking ahead six months from now, do you expect your personal financial situation to be much stronger, somewhat stronger, about the same, somewhat weaker, or much weaker than it is now?
  6. Compared to 6 months ago, are you NOW more or less comfortable making a major purchase, like a home or car?
  7. Compared to 6 months ago, are you NOW more or less comfortable making other household purchases?
  8. Compared to 6 months ago, are you NOW more or less confident about job security for yourself, your family and other people you know personally?
  9. Compared to 6 months ago, are you NOW more or less confident of your ability to invest in the future, including your ability to save money for your retirement or your children’s education?
  10. Thinking of the last 6 months, have you, someone in your family or someone else you know personally lost their job as a result of economic conditions?
  11. Now look ahead at the next six months. How likely is it that you, someone in your family or someone else you know personally will lose their job in the next six months as a result of economic conditions?

 

Additional questions

 


About the Study

These findings are based on data from an Ipsos survey conducted June 2-3, 2020 with a sample of 966 adults aged 18-74 from the continental U.S., Alaska and Hawaii who were interviewed online in English. The sample was randomly drawn from Ipsos’ online panel, partner online panel sources, and “river” sampling and does not rely on a population frame in the traditional sense. Ipsos uses fixed sample targets, unique to each study, in drawing a sample. After a sample has been obtained from the Ipsos panel, Ipsos calibrates respondent characteristics to be representative of the U.S. Population using standard procedures such as raking-ratio adjustments. The source of these population targets is U.S. Census 2016 American Community Survey data. The sample drawn for this study reflects fixed sample targets on demographics. Post-hoc weights were made to the population characteristics on gender, age, race/ethnicity, region, and education.

Statistical margins of error are not applicable to online non-probability polls. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 3.6 percentage points for all respondents. Ipsos calculates a design effect (DEFF) for each study based on the variation of the weights, following the formula of Kish (1965). This study had a credibility interval adjusted for design effect of the following (n=966, DEFF=1.5, adjusted Confidence Interval=+/-5.1 percentage points).

Findings from previous time periods going back to March 2011 are based on data from Refinitiv /Ipsos’ Primary Consumer Sentiment Index (PCSI) collected in a monthly survey on Ipsos’ Global Advisor online survey platform with the same questions. For the PCSI survey, Ipsos interviews a total of 1,000+ U.S. adults aged 18-74. The Refinitiv/Ipsos Primary Consumer Sentiment Index (PCSI), ongoing since 2010, is a monthly survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments. The PCSI metrics reported each month consist of a “Primary Index” based on 10 questions available upon request and of several “sub-indices” each based on a subset of these 10 questions. Those sub-indices include a Current Index, an Expectations Index, an Investment Index and a Jobs Index.

Findings for January 2002- February 2011 are based on data from the RBC CASH Index, a monthly telephone survey of 1,000 U.S. adults aged 18 and older conducted by Ipsos with a margin of error of +/- 3.1 percentage points.

For more information on this news release, please contact:

Chris Jackson
Vice President, U.S., Public Affairs
Ipsos
+1 202 420 2025
chris.jackson@ipsos.com

Kate Silverstein
Media Relations Specialist, U.S., Public Affairs
Ipsos
+1 718 755-8829
kate.silverstein@ipsos.com

For more information on COVID-19 please click here

About Ipsos

Ipsos is the world’s third largest market research company, present in 90 markets and employing more than 18,000 people.

Our passionately curious research professionals, analysts and scientists have built unique multi-specialist capabilities that provide true understanding and powerful insights into the actions, opinions and motivations of citizens, consumers, patients, customers or employees. We serve more than 5000 clients across the world with 75 business solutions.

Founded in France in 1975, Ipsos is listed on the Euronext Paris since July 1st, 1999. The company is part of the SBF 120 and the Mid-60 index and is eligible for the Deferred Settlement Service (SRD).

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    • Compared to six months ago, 68% say they are less comfortable making a major purchase like a home or a car, down from 74% last week.
    • Compared to six months ago, 62% say they are less comfortable making other household purchases, down from 68%.
    1. Now, thinking about our economic situation, how would you describe the current economic situation in US? Is it… very good, somewhat good, somewhat bad or very bad?
    2. Rate the current state of the economy in your local area using a scale from 1 to 7, where 7 means a very strong economy today and 1 means a very weak economy.
    3. Looking ahead six months from now, do you expect the economy in your local area to be much stronger, somewhat stronger, about the same, somewhat weaker, or much weaker than it is now?
    4. Rate your current financial situation, using a scale from 1 to 7, where 7 means your personal financial situation is very strong today and 1 means it is very weak
    5. Looking ahead six months from now, do you expect your personal financial situation to be much stronger, somewhat stronger, about the same, somewhat weaker, or much weaker than it is now?
    6. Compared to 6 months ago, are you NOW more or less comfortable making a major purchase, like a home or car?
    7. Compared to 6 months ago, are you NOW more or less comfortable making other household purchases?
    8. Compared to 6 months ago, are you NOW more or less confident about job security for yourself, your family and other people you know personally?
    9. Compared to 6 months ago, are you NOW more or less confident of your ability to invest in the future, including your ability to save money for your retirement or your children’s education?
    10. Thinking of the last 6 months, have you, someone in your family or someone else you know personally lost their job as a result of economic conditions?
    11. Now look ahead at the next six months. How likely is it that you, someone in your family or someone else you know personally will lose their job in the next six months as a result of economic conditions?
    1. To what extent do you agree or disagree with each of the following?
      1. The economy will recover quickly once the lockdown is over
      2. We should restart the economy and allow businesses to open even if the virus is still not fully contained

The author(s)

  • Nicolas Boyon Senior Vice President, US, Public Affairs
  • Catherine Morris Data Journalist, US, Public Affairs

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