US consumers lose confidence

WASHINGTON: US consumer confidence dropped to a near three-year low in March as households worried about the economy’s near-term outlook amid the coronavirus pandemic, which has upended life for Americans.

The survey from the Conference Board on Tuesday came in the wake of reports last week showing the number of Americans filing for unemployment benefits racing to a record 3.28 million in the week ending March 21, and business activity hitting an all-time low in March.

The country has ground to a sudden stop as authorities enforce strict measures to control the spread of the coronavirus, which causes a respiratory illness called Covid-19.

The United States has the highest number of confirmed Covid-19 cases, with more than 163,000 people infected. At least 3,017 people in the US have died from the illness, according to a Reuters tally.

The Federal Reserve has taken extraordinary measures and President Donald Trump last Friday signed a $2.2 trillion stimulus package to ease the blow on the economy, which economists believe is already in recession.

The Conference Board said its consumer confidence index decreased to a reading of 120.0 in March, the lowest since July 2017, from an upwardly revised 132.6 in February.

Economists polled by Reuters had forecast the index falling to 110.0 in March from the previously reported reading of 130.7 in February.

The smaller-than-expected decline in confidence is likely because the cutoff date for the survey was March 19, before many states and local governments ordered residents to stay at home or shelter in place, and shuttered restaurants, bars and other social-gathering venues.

The Conference Board said it expected further declines as the fallout from the coronavirus intensifies and viewed March’s drop in confidence as being “more in line with a severe contraction, rather than a temporary shock.”

“The consumer confidence index is likely to continue to fall as the hit to the economy is going to be even harder than it was in the Great Recession over a decade ago,” said Chris Rupkey, chief economist at MUFG in New York.

“We are starting to lose confidence ourselves that the economy can be restarted as easily as government officials are saying as the expected length of the coronavirus shutdown grows ever longer.”

Other data on Tuesday showed manufacturing activity in the Midwest contracted further in March.

The Chicago Purchasing Management Index, also known as the Chicago Business Barometer, dropped to a reading of 47.8 this month from 49.0 in February.

The index is jointly developed by MNI Indicators and ISM-Chicago. A reading below 50 means the Midwest manufacturing sector is contracting.

A third report on Tuesday showed the S&P CoreLogic Case-Shiller 20-metroarea house price index increased 3.1% from a year ago in January after rising 2.8% in December.