Consumer confidence edges up

Consumer confidence inched up following the passage of the second coronavirus relief package.

Morning Consult’s Index of Consumer Sentiment rose 1.5 points week-over-week to 87.7 on a scale of roughly 120, according to interviews conducted Dec. 20 through Jan. 5. In the year-ago period, consumer confidence stood at 113.

“Consumer confidence is likely to continue to increase throughout January as a growing share of adults receive stimulus checks and federal unemployment insurance benefits,” the research firm stated.

The firm noted that the second coronavirus relief package, which was signed into law on Dec. 27, had a more immediate positive impact on consumer confidence than the CARES Act in March 2020, even though the $600 stimulus checks are roughly half the size of what was included in the first aid bill. 

“One reason for the more immediate impact is that the Treasury Department deposited and sent stimulus checks much faster this time because the agency already had the relevant eligibility and delivery information, meaning consumers can see the money in their bank accounts sooner,” Morning Consult said.

Although consumer confidence inched up, pay and income losses are on the rise across the United States. During the week ending Jan. 2, 18.3% of adults experienced a loss of pay or income, up roughly 3% from the first week of November. However, additional consumer spending should increase demand for workers, thereby driving down the incidence of unemployment in the second half of the month, according to Morning Consult.