economy Markets

As Consumer Confidence Falls Most In 47 Years, Kevin Hassett Appeals To ‘God’ For Recovery

In case you were curious, Hassett sees the jobless rate rising as high as 20% by June.

Consumer confidence fell off a cliff in April.

And by that, I mean The Conference Board’s gauge dropped 31.9 points from March, the most in 47 years. The index now sits at 86.9. This is one time when consensus was bang-on. The estimate was 87 (the forecast range was 65-103).

Remember, last month witnessed a steep drop too. After two months, February’s print isn’t even visible from down here.

The Present Situation Index fell the most on record, suffering a comical 90-point decline to 76.4 from 166.7 prior.

That, Lynn Franco, Senior Director of Economic Indicators at The Conference Board, said, “reflects the sharp contraction in economic activity and surge in unemployment claims brought about by the COVID-19 crisis”. Thanks, Lynn.

The Expectations index, though, actually improved, printing 93.8 from 86.8 in March. That disconnect – between the assessment of things as they are now, and how things will look later – reflects a similar disparity in the University of Michigan’s sentiment gauges, and continues to suggest that Americans view the coronavirus crisis as cyclical, not systemic.

“Consumers’ short-term expectations for the economy and labor market improved, likely prompted by the possibility that stay-at-home restrictions will loosen soon, along with a re-opening of the economy”, Franco went on to say, before cautioning that “consumers were less optimistic about their financial prospects and this could have repercussions for spending as the recovery takes hold”.

Not surprisingly, consumers’ take on the labor market deteriorated markedly. Those saying jobs are “plentiful” plunged to 20% from 43.3%, while those saying jobs are “hard to get” surged from 13.8% to 33.6%.

Meanwhile, Kevin Hassett (who returned to the White House to advise on the crisis) showed up on CNN and delivered a series of remarks which underscore the severity of the situation as it stands now.

Second quarter GDP will be “a big negative number”, Hassett said, adding that a rebound in the second half of the year depends heavily on the next aid package. Remember, the virus relief bills passed so far aren’t really “stimulus” given there’s nothing to “stimulate” – right now, we’re merely ensuring everyone doesn’t become insolvent. It is only in the next bill that spending can be realistically construed as stimulative.

Later, Hassett told reporters it’s “very likely there’ll be a phase-four deal and we’re going to be speaking with the president throughout the week about what he thinks should be in there”. It’s possible that more direct payments to struggling Americans are in the cards, he said.

In case you were curious, Hassett sees the jobless rate rising as high as 20% by June. He characterized a recovery later this year as follows: “God willing”.

Read more: ‘Less Than Half Of Working Age Americans Will Be Earning A Wage Next Month’, One Bank Warns

5 comments on “As Consumer Confidence Falls Most In 47 Years, Kevin Hassett Appeals To ‘God’ For Recovery

  1. this vector of thinking makes me nervous as I cannot tell if it is ignorance or wishful thinking – hope is never a sound strategy, “… reflects a similar disparity in the University of Michigan’s sentiment gauges, and continues to suggest that Americans view the coronavirus crisis as cyclical, not systemic.” obviously, I believe that the changes it brings about will be systemic

  2. My wife works in medical manufacturing for heart implants and is being put on reduced hours for lack of demand. I think that says a lot… pacemakers and defibrillators are hardly optional yet demand is down and there will not be surge capability to make up the shortfall if things do pickup. Along with meat and produce I’m not sure if we won’t also see shortages of supplies in many vital industries coming out of this. Potentially prolonged ones as the supply chain from top to bottom will be downsized.

  3. And I guess you could say that 58,000 mostly seniors with medical pre-conditions dying will also start to impinge on the need for some medical personnel and equipment. Sadly.

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