U.S. consumer sentiment in March saw the 4th largest monthly drop in nearly a half century


The Michigan Consumer Sentiment Index (MSCI), a monthly telephone survey that looks to capture the overall sentiment of the U.S. consumer, registered the 4th largest monthly decline in nearly 50 years. The index is often used by investors as a measure of near-term consumer spending expectations. According to the Bureau of Economic Analysis, consumer spending made up ~70% of U.S. GDP in 2019.


The consumer sentiment index fell more 11.9 points in March, only bested by a 12.7 decline in response to the Great Recession in October 2008, and a pair of 12.2 point declines surrounding Hurricane Katrina and in response to a 1980 recession that saw close to 11% unemployment at its height.

While the index currently sits at 89.1, still above 50-year and post-Great Recession averages, the index is expected to see further declines in the coming months.

In the University of Michigan Surveys of Consumers March report, chief economist, Richard Curtin, noted that if the sentiment index were to "stabilize at its most recent seven-day average, it would imply an additional decline of nearly 18.2 index points in April." Indeed, if the sentiment index were to decline that much, it would clock a new record decline in a two-month span.

"Stabilizing confidence at its month's end level will be difficult given surging unemployment and falling household incomes. The extent of additional declines in April will depend on the success in curtailing the spread of the virus and how quickly households receive funds to relieve their financial hardships."

Curtin, in an update last week, wrote, "An economic recession has already begun, and it is likely to reduce consumer spending for a period that is two to three times as long as the virus crisis."

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Related Reading

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

TRON USDC now available

Delivering on a vision for an interoperable global standard for dollar digital currency, Circle and TRON have partnered to make USD Coin (USDC) available on the TRON blockchain, which has grown to more than 56 million accounts and nearly 2.5 billion transactions since its founding just four years ago. TRON is home to a broad ecosystem for digital assets in Asia and around the world, and the TRON community can now benefit from easy access to the world's fastest-growing, regulated dollar digital currency. 
Read Full Story
Sponsored Post

Layer-1 Platforms: A Framework for Comparison

The Block Research was commissioned by Algorand to create Layer-1 Platforms: A Framework for comparison, which provides a “look under the hood” at seven platforms: Algorand, Avalanche, Binance Smart Chain, Cosmos, Ethereum/Ethereum 2.0, Polkadot, and Solana. We assess their technical design, related ecosystem data, and qualitative factors such as key ecosystem members to get an understanding of how they differ. Having done this analysis, we draw some insights for what the future of the broader smart contract landscape could look like for years to come. 
Read Full Story
Aug 11, 2021, 5:18PM UTC