U.S consumer sentiment declines in March amidst the Coronavirus emergency

The University of Michigan (UoM) released its monthly report on the U.S consumer sentiment on Friday. The data suggested sentiment to have dropped in March in the United States. According to the experts, the decline was largely attributed to the Coronavirus pandemic that is weighing on households and businesses alike. Downward rallies in stock indices also contributed to the negative monthly report on consumer sentiment.

According to the University of Michigan, the consumer sentiment index saw a 5.0% decline in March to record at 95.9. In February, the reading was reported at a much higher 101. Economists, on the other hand, had forecast the U.S consumer sentiment index to print at 95.0 this month. The prelim UoM consumer sentiment came stronger than the forecast but declined sharply as compared to the previous month.

Further Downside In Confidence Is Expected In The Upcoming Months

The University of Michigan commented on Friday’s data and highlighted that the health emergency hasn’t hit the consumer sentiment as hard as the financial crisis of 2008. It, however, recommended caution as Friday’s data may not reflect the broader impact of Coronavirus on the economy that could get worse in the upcoming months.

As the virus continues to spread across borders with the U.S count of confirmed Coronavirus cases rising exponentially, the University of Michigan expects a further drop in confidence in its next reports. According to the economic data, while the current conditions sub-index lost 2.3 points in March to record at 112.5, the decline in future expectations sub-index was much steeper (6.8 points) this month to 85.3.

Current Global Stats For Morbidity And Mortality Rates Of Coronavirus

The Coronavirus pandemic has so far infected over 1,20,000 people worldwide and has caused around 5,000 deaths. The virus originated in Wuhan, China but has now spread not only to other parts of Asia, but also in Europe, Australia, Africa, and North America. In an attempt to contain the spread of the virus, one of the largest European economies, Italy, has ordered a countrywide lockdown.

The U.S dollar index and consequently the forex market remained fairly volatile on Friday. One of the most traded currency pairs, EUR/USD, was seen rallying as high as 1.1220 on Friday morning. It was then followed almost immediately by a downward rally that pushed the pair as down as 1.1065 following the UoM report. At the time of writing, EUR/USD is trading at 1.1075.