U.S. consumer sentiment showed signs of stabilizing in late April, though not enough to prevent a record monthly decline in the face of unprecedented layoffs and elevated concerns about personal finances.
The University of Michigan’s final sentiment index for April slumped 17.3 points to 71.8 from a month earlier after a preliminary reading of 71, according to data Friday. The measure, while the lowest since 2011, was higher than the median projection of 68 in a Bloomberg survey of economists.
The gauge of current conditions fell to 74.3, better than the 72.4 preliminary reading, while a measure of expectations dropped to 70.1. The survey was conducted March 25 through April 20; the preliminary reading reflected responses through April 7.
Shutdowns of non-essential businesses across most U.S. states have resulted in an unprecedented 26.5 million applications for jobless benefits in the past five weeks. With thousands of storefronts closed as governments await some semblance of easing in the health crisis, consumer spending has weakened significantly.
“In the weeks ahead, as several states reopen their economies, more information will reach consumers about how reopening could cause a resurgence in coronavirus infections,’’ said Richard Curtin, director of the survey, in a statement. “Consumers’ reactions to relaxing restrictions will be critical.’’
The share of respondents who reported improved finances fell to 38% this month, a sharp reversal since reaching an all-time high of 58% in February, the university said. A worsening economy was expected by 89% of all consumers, only below the peak of 96% in February 2009, during the last recession.
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