“Consumer Confidence Booms in Year Defying Recession Predictions

As the calendar year comes to a close, it’s clear that despite predictions of a recession, 2020 has ultimately been a fairly resilient year for the global economy. In particular, the American consumer confidence index has seen a sharp rise in the last month, to the highest level since the pandemic crisis began in March. The U.S. Conference Board reported that its consumer confidence index rose 20.7 points to a score of 109.9 in December, a near-record high since 2018. The increase was primarily driven by consumers feeling optimistic about the economy as the coronavirus vaccines become available. Surprisingly, consumer sentiment stands despite the nation’s massive economic contraction in the second and third quarters. Economists expected to see further losses after Congress did not deliver a second stimulus in December, but consumer confidence was able to push through the uncertainty of the situation. The Conference Board also reported that consumers felt more optimistic about their current economic standings despite the possibility of layoffs. The survey found that more than one third of respondents felt they were better off financially than they were 12 months ago, a rate that has remained unchanged for the last eight months. The positive numbers come despite unemployment still being higher than it was before the pandemic hit the United States. The national unemployment rate was 6.7% in December, which is 1.3 percentage points higher than it was in February of 2020. It is incredibly encouraging to see the American economy showing resilience despite the disastrous effects of the pandemic. The jump in consumer confidence does appear to show consumers are hopeful that 2021 will be an economically recovering year for the nation. It is still too early to tell what the impact of the pandemic will be on the economy in the long run, but as we close out 2020 the overall outlook appears to be encouraging. Let’s hope that the jump in consumer confidence is indicative of a stronger economy in the months and years to come.