SAN FRANCISCO–As the coronavirus continues to take its toll on the economy and the country enters into a potential recession, a new survey finds consumers are more confident at this point than they were prior to the Great Recession.
It should be noted, however, that the survey took place prior to much of the U.S. being placed on lockdown as a result of the virus.
The February Money Anxiety Index is near record low at 40.9, and the preliminary February University of Michigan Consumer sentiment Index rose to a high of 100.9 in February, noted Dr. Dr. Geller president of Analyticom and the developer of the Money Anxiety Index. “These two indices, which are inverse--low money anxiety equals high consumer confidence--show that consumers are holding on to their confidence longer,” said Geller.
Geller noted prior to the Great Recession, the Money Anxiety Index started increasing 14 months prior to the recession, and the University of Michigan Consumer Sentiment Index started declining about a year before the official recession of 2008/9.
‘No Systemic Issues’
“Granted, the March Money Anxiety Index will go up and the University of Michigan Consumer Sentiment Index will go down, but still, consumers are exhibiting greater resiliency this time around,” said Geller. “Consumers are more confident this time around because they know that we are facing a temporary healthcare crisis rather than an underling economic problem. This time around there is no systemic issues, and the economy is fundamentally hearty. The fact that consumers exhibited high confidence all the way to February indicates that we can expect them to bounce back as soon as the healthcare crisis is over.
"The reason the stock market declined so much in the last couple of weeks is because many traders acted impulsively rather than analytically," Geller added. “Those who sold in panic will end up being the biggest losers once the market bounces back - and it always does."