CBS reports largest drop in consumer confidence ever
Consumer confidence deteriorated enormously in April due to the corona crisis. Consumer confidence fell from -2 in March to -22 in April. That is the largest drop ever, but not the lowest level ever. Both the opinion on the economic climate and the willingness to buy have deteriorated sharply.
At -22, consumer confidence in April is well below the average over the past twenty years (-5). Confidence reached an all-time high in January 2000 (36). The lowest point was reached in March 2013 (-41).
Never been so negative about economic situation
Consumers are much more negative about the economy than in March. The sub-indicator economic climate goes from -8 to -31. Consumers have never been more negative about the economy in the next twelve months than in April 2020. The previous low was reached in November 2011, during the euro crisis. Consumers are almost as positive about the economy of the past 12 months as they were in March.
Biggest drop in willingness to buy ever
Willingness to buy has also deteriorated sharply. This sub-indicator goes from 2 in March to -17 in April, the largest drop ever. Consumers' opinion of their financial situation in the next 12 months is deteriorating considerably. Consumers also find the time for making large purchases much less favorable than in the previous month. The deteriorations in these two components of willingness to buy are also the largest ever. On the other hand, consumers' opinions about their financial situation in the past 12 months are more positive.
Most consumers expect unemployment to rise
Having a job plays a major role in consumers' willingness to buy. They were much more negative about future unemployment than in March. Here, too, the deterioration was the largest ever. About 85 percent of respondents expect unemployment to increase in the next 12 months, 8 percent foresee a decline. This brings the balance of positive and negative answers to -78. The low of the unemployment rate was -88 in March 1993.
The corona crisis has a major effect on consumer confidence. The time series model used has been adjusted to ensure that the level of the series and the seasonal influences are correctly estimated. As a result, the accuracy of the figures is lower than normal.