SHOPSMART AUTOS – CUSTOMER INFORMATION – JANUARY 22, 2021
Many Americans Are Feeling Confident As Inauguration Day (PT.1)
Americans are feeling notably confident this week as the details of a third stimulus package start to emerge and preparations continue for Inauguration Day—despite a day of violence at the Capitol last week. Consumer confidence reached its highest point since September at 54.5, according to the Forbes Advisor-Ipsos Consumer Confidence Weekly Tracker. The survey, conducted by Ipsos, measures consumer sentiment over time. American confidence at this point—in the midst of a recession and on the eve of a presidential transition—is notably higher than it was during the last time we faced comparable circumstances in January 2009. While the two recessions are far from carbon copies of one another, the difference reveals how this economic downturn is unequally affecting Americans. How Long Will The $600 Stimulus Check Confidence Boost Last? While both overall consumer confidence and job security confidence are holding steady in the mid-50s (out of 100) this month, that’s far more optimistic than in January 2009. At that time, jobs confidence was just over 40, with overall confidence at a mere 37.8—one of the lowest points since Ipsos began tracking consumer sentiment. But 2021’s optimism may conceal a deepening rift between low- and high-income Americans. In a speech this week, Lael Brainerd, an economist on the Federal Reserve Board of Governors, said unemployment for workers with the lowest wages is likely above 20%, while workers in the top quarter of earners is likely below 5%. Those Federal Reserve estimates are a strong indication that economic recovery will be K-shaped, where wealthier Americans will emerge from the pandemic largely unscathed but poorer Americans will struggle to get back on track. Recovery after the 2008 crash, meanwhile, was V-shaped, with a greater swath of the population experiencing the steep and sudden decline before a speedy recovery. Full-time workers and households with incomes above $100,000 are notably more confident about their finances and the economy, according to the Consumer Confidence Weekly Tracker, with the unemployed and households earning less than $50,000 feeling notably less confident. More than half (54%) of respondents agreed that the economy will recover quickly once coronavirus restrictions are relaxed. But 46% of people still said it’s likely they, a family member, or a friend will lose their job in the next six months due to the economy, the same level as last week. Last week, nearly one million (965,000 people) filed initial unemployment claims, an increase of 181,000 over the week prior.
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