U.S. consumer sentiment not improving despite lockdown easing

Poor jobs climate is driving down confidence; three quarters of Americans feel less comfortable making major purchases

The author(s)

  • Nicolas Boyon Senior Vice President, 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, May 14, 2020 — At 45.2, Ipsos’ Consumer Confidence index is down by one point from last week and has reverted to where it was when many parts of the country went into lockdown. The Jobs index continues declining and is at its lowest level since 2010.

The Ipsos survey of nearly 1,000 U.S. adults, conducted May 12-13, shows the country is evenly divided between those who believe the economy will recover quickly once the lockdown is over and those who don’t believe it will. However, three quarters of those surveyed (74%) report feeling less comfortable making a major purchase such as a home or a car than they were six months ago – the highest level recorded since the pandemic started.

Detailed Findings

  1. With an index score of 45.2, overall consumer confidence is down one point from last week, three points from two weeks ago, and is now at the same level as at the end of March and in early April. Nevertheless, it is still not anywhere as low as in the months following the 2008 financial crisis.
    1. •The Confidence index is about 18 points lower than it was at the beginning of the year (63.4) and 15 points lower than it was in early March (60.1).
       

      Consumer Confidence

       

  2. The Jobs index shows a significant drop over last week, suggesting the drop in overall consumer sentiment is driven by the poor jobs climate.

    1. •The Jobs index, indicative of the employment situation and outlook, is down 2.1 points vs. last week and is now about 22 points lower than in early March.
    2. •The Current index, indicative of sentiment about today’s economic environment is down again this week (by 0.7 point) and 20 points lower than when the pandemic broke in the U.S.
    3. •The Investment index is almost unchanged from last week and nearly 16 points below its early-March level.
    4. •In contrast, the Expectations index, indicative of Americans’ outlook about their personal financial situation, their local economy and employment, is roughly at the same level as it was before any part of the U.S. went under lockdown.Sub-indices

       

  3. Nearly as many agree that the economy will recover quickly once the lockdown is over (49%, up six points since last week) as disagree (48%, down five points).
    1. •Compared to two weeks ago, those who expect the economy to recover quickly continue to have very high expectations (their Expectations index is almost unchanged at 74.3), but their overall sentiment is down (their Consumer Confidence index fell by more than four points to 52.2) and their feeling about the employment situation and outlook has dropped sharply (their Jobs Index is down nearly nine points to 50.3)
    2. •In contrast, those who do not expect the economy to recover quickly show a drop of nearly four points in their Expectations index (to 51.9), but little change in how they index on their overall consumer confidence (38.6) and their sentiment about jobs (45.7).
    3. •Compared to last week, the belief that the economy will turnaround fast shows less political polarization as it slightly decreased among Republicans (60%, down 3 points) while it increased among Democrats (38%, + 7 points) and Independents (47%, +13 points).
    4. Opinion1

       

  4. A majority of Americans (54%) continue to disagree that “we should restart the economy and allow businesses to open even if the virus is still not fully contained”. However, those who agree now make up 43% of the public (+4 points over last week).
    1. •Those who believe the economy will recover quickly are more likely to agree (56% of them do) than are those who don’t believe it will (only 31% agree).Opinion2

       

  5. Compared to six months ago, 74% say they are less comfortable making a major purchase, like a home or car, and 68% say they are less comfortable making another household purchase.
    1. •The level of discomfort with making major purchases is at its highest since the pandemic.
    2. •The level of discomfort with making other household purchases has barely changed over the past two months.Major 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

  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

 


About the Study

These findings are based on data from an Ipsos survey conducted May 12-13, 2020 with a sample of 970 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 3.5 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=970, DEFF=1.5, adjusted Confidence Interval=+/-5.0 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
[email protected]

Kate Silverstein
Media Relations Specialist, U.S., Public Affairs
Ipsos
+1 718 755-8829
[email protected]

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The author(s)

  • Nicolas Boyon Senior Vice President, US, Public Affairs

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