U.S. consumer sentiment falls as coronavirus cases surge
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Washington, DC, November 19, 2020 — As coronavirus cases surge across the country and the sitting President is disputing the outcome of the election, all indices this week are down approximately 3 points compared to the week before the election. Overall consumer sentiment indexes at 49.5 in this week’s Ipsos-Forbes Advisor U.S. Consumer Confidence Tracker, a decline of 3.7 points from the week prior.
The steepest declines in sentiment are seen among Republicans as the stubborn partisan divide in views on economic indicators present throughout the pandemic narrows to a vanishing point.
- Republicans now index at 50.6 in Consumer Confidence, down 7.1 from last week and down 13.5 from the week before the election.
- Democrats index at 49.0, down 2.4 from last week, but still higher than in the days ahead of the eve of the election by 3.2 points.
- The confidence gap between Republicans and Democrats is down to 1.6 points, compared to a pandemic-era average of 14.5 points until the election.
Against this gloomy backdrop, many Americans plan to pull back holiday spending this year. Half of Americans say they expect to spend less for the holidays this year than they did last year – 23% a lot less and 26% a little less.
- Thirty-nine percent say they expect to spend about the same and only 12% expect to spend more (9% a little more and 3% a lot more).
- Those who are especially likely to say they will spend less include parents of a child in the household (58%), those with a household income under $50,000 (57%), non-whites (56%), Democrats (56%), those who are unemployed (56%) or work part-time (55%), women (54%), and those aged 35-54 (54%).
- Of note, among those with a household income of $100,000 or greater – a group that drives a disproportionately high share of retail sales – more say they will spend less (43%) than the same (40%) or more (17%) than last year.
1. Scoring at 49.5, the latest overall Consumer Confidence fell 3.7 points from last week.
- The Confidence index is currently on par with the pandemic average, and 10.6 points lower than where it stood in early March (60.1).
2. Both the Current and Investment sub-indices have reverted to their respective pandemic averages. At 40.2, the Current sub-index is down 6.3 points from last week and down 3.4 points from before the election. The Investment sub-index shows a similarly steep decline of 5.7 points from last week and is down 2.7 points from the week before the election.
3. Jobs confidence is down 1.6 points from last week and concern about future job losses is at its highest point in three months. First-time unemployment claims ticked back up to 740,000 last week.
- The proportion of Americans reporting they, a family member, or a personal acquaintance lost their job in the past six months due to economic conditions, 42%, is down 2 points from last week.
- However, 53% say it’s likely they, a family member or a personal acquaintance will lose their job in the next six months due to economic conditions, consistent with last week and up 7 points from before the election.
4. Many Americans plan to rein in holiday spending, with 49% saying they plan to spend less this year than last.
5. Views on a quick economic recovery are evolving as 53% foresee a quick economic recovery once pandemic restrictions are lifted on businesses, up 6 points from last week. Those who disagree fell 6 points from last week, at 40%.
6. The nation remains divided on restarting the economy if the coronavirus is not fully contained yet (46% agree that businesses should be allowed to open up again, 50% disagree).
7. A majority of Americans are uncomfortable with making significant purchases, like a home or a car, or other investments in the household.
- Compared to six months ago, 35% say they are more comfortable making a major purchase like a home or a car, down 8 points from last week.
Compared to six months ago, 41% say they are more comfortable making other household purchases, down 7 points from last week.
The data used for the Consumer Confidence index and sub-indices is based on the following questions:
- 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?
- 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.
- 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?
- 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
- 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?
- Compared to 6 months ago, are you NOW more or less comfortable making a major purchase, like a home or car?
- Compared to 6 months ago, are you NOW more or less comfortable making other household purchases?
- 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?
- 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?
- 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?
- 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?
Q. To what extent do you agree with the each of the following
- The economy will recover quickly once the restrictions to control the coronavirus pandemic are relaxed.
- 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 on November 17-18, 2020 with a sample of 934 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=934, 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.
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