Consumers see a brighter future amid coronavirus crisis, but economists disagree
Consumer sentiment around the globe is starting to recover, data firm Morning Consult finds, despite economic projections for weakening growth and worse outcomes.
Where it stands: Ratings agency Fitch said Wednesday it expects global GDP to decline by 3.9% this year, "twice as large as the decline" it predicted just weeks ago and "twice as severe as the 2009 recession."
- Bovino and S&P Global senior U.S. economist Satyam Panday expect U.S. GDP will shrink by 5.2% this year — about four times their March forecast of a 1.3% contraction — and unemployment will hit 19%.
- "The current recession has likely reduced economic activity by 11.8% peak to trough, which is roughly three times the decline seen during the Great Recession in one-third of the time," they wrote in a recent note to clients.
However, in its latest reading of consumer sentiment, Morning Consult finds respondents are showing increasing optimism about the future, as the number of people who say they expect to be worse off in a year has consistently declined.
- Sentiment hit an all-time low on April 7, after falling 30% in a matter of days, but has stabilized over the past two weeks.
- That recovery has came entirely from expectations about the future rather than the present, as the percentage of people who say they are better off financially now than they were 12 months ago and who believe that now is a good time to make a major household purchase remain at all-time lows of 19% and 17%, respectively.
Go deeper: The gamble to re-open the economy