Buyers are still feeling gloomy

State’s consumers remain pessimistic in wake of COVID

Consumers across the state remained pessimistic about the economy in the second quarter, although they felt somewhat better than during the first quarter, when the economy ground almost to a halt as the COVID-19 pandemic intensified, the Siena College Research Institute reported Wednesday.

The institute’s Index of Consumer Sentiment stood at 71.0, up 4.6 points from March but 22 points below its November 2019 reading of 93.0, before the pandemic.

All the gain came from New York City, which had been hit early on by the coronavirus. Upstate, the index fell 1 point, said Doug Lonnstrom, the institute’s founding director.

And a national survey by the University of Michigan showed an even sharper decline, dropping 11 points from the first quarter.

The coronavirus and the quarantines that followed likely affected buying plans, with consumer plans to buy home electronics and make home improvements up sharply from the first quarters. But both, as well as buying plans for vehicles, houses and furniture, all were down sharply from 2019’s fourth quarter.

And with everything from long-distance travel to commuting to the office or school down sharply, so was concern about gasoline prices. Just 25 percent of respondents said gasoline prices were having a serious or somewhat serious

impact on their finances, the lowest figure since the question first appeared on the survey 12 years ago.

Food price concerns were stable from previous quarters.

The point at which pessimism and optimism are in balance hovers around 76. That suggests upstate respondents, with an index of consumer sentiment at 68.0, are more pessimistic than New York City residents at 72.5. The national index, at 78.1, suggests the country as whole was more optimistic than pessimistic, but that may change as the pandemic intensifies elsewhere in the country.

The Index of Consumer Sentiment includes two components, an index of current economic conditions and one of consumer expectations for the future. Both upstate New York respondents and those responding to a separate nationwide survey conducted by the University of Michigan were less optimistic about the future than were New York City residents, where the future expectations index was up five points from the current figure. Upstate, the future index was down nearly six points, while the national figure of future expectations was down nearly 15 points.

Economists monitor consumer sentiment because it correlates with their willingness to spend. And consumer spending makes up nearly 70 percent of the nation’s overall economic activity.

That activity has taken a hit as sales plunged in the wake of retail and other shutdowns and as millions of workers nationwide were furloughed. The pandemic continues to have an impact, especially on the tourism industry during what should be the height of the summer travel season.

Instead, many are staying close to home.

A friend who installs swimming pools, Lonnstrom said, told him “the pool business is booming.”