Due to the harm the coronavirus outbreak is doing to the economy, the Federal Reserve was taking extreme measures, and Congress has approved a $2 trillion stimulation program.
Lida Boussaur, a senior US economist at Oxford Economics, said, “The measures of social distortion in response to the rapidly spreading coronavirus, coupled with rapid financial market volatility, will have a serious impact on the main engine of economic growth.”
The University of Michigan said that it might fall further because of high unemployment and less income.
The University of Michigan Consumer Sentiment Index fell to 89.1 this month, that’s the lowest it has been since October of 2016. It was 101 in February; the fall is the largest in more than a decade.
“People are trying hard to comprehend the size and length of the economic jolt from COVID-19,” said Chris Low, chief economist at FHN Financial in New York. “Job losses would be the most vivid demonstration of this new reality. As the fact sinks in, optimism is very likely to fall to the mid-50s by May.” The former record was established in 1982, at 695,000.
Those two signs have economists forecasting that the nation will enter a recession.
Consumer sentiment in the U.S. is down into some three-and-a-half-year low on account of the impacts of the coronavirus and social networking measures, and consumer spending is down too, according to a report by Reuters.
American stocks dipped after a short rally brought on by the approaching stimulus bill. Economists forecast that consumer spending will observe a decrease in Q1.
The Commerce Department reported that consumer spending was up 0.2% in February as individuals spent on gas and electricity. February was the third consecutive month of a 0.1% growth.