Six months into the pandemic, Americans are beginning to feel much better about the economic recovery. Consumer confidence soared to its highest level since Covid-19 swept across the country, The Conference Board reported Tuesday.
In spite of rising infections, stalled negotiations for another stimulus package on Capitol Hill and a slowing jobs recovery, Americans are increasingly optimistic about the short-term business outlook, the job market, and their financial prospects.
“This is much needed good news about the American consumer and potential spending,” said Jennifer Lee, senior economist at BMO.
Some two-thirds of the US economy rely on consumer spending, so how people feel about this recovery is an important piece of the puzzle as the country tries to get back to normal.
The survey-based consumer confidence index climbed to 101.8 points in September, compared to 86.3 points in the previous month. Consumers are more optimistic about both the current business and labor market conditions, as well as the short-term outlook.
That said, the consumer confidence index remains well below its pre-pandemic level; in February, it stood at just above 130 points.
The two economies
The recovery has been a tale of two economies.
On the one hand, the country has made a lot of progress since the spring lockdown. For example, millions of jobs have been recovered since the spring lockdown wiped out more than 22 million positions. But the country still remained down 11.5 million jobs as of August.
For the lucky ones who never lost their jobs or returned to work, the recovery is moving in the right direction. But for those still relying on government benefits, things look very different. Since July, weekly jobless benefit checks are much smaller, and hunger has become a bigger issue across the country.
Joblessness will continue to hold back the recovery because workers struggling to make ends meet won’t have extra money to spend and help repair the economy.
Another stimulus package could help bolster the wallets of people who have lost employment through no fault of their own. But the window to get a deal done until the November election is running out.
The handling of Covid and the recovery is a major part of the presidential contest between President Donald Trump and former Vice President Joe Biden. They’re meeting for the first debate Tuesday night.
Trump continues to score strong reviews for the economy, despite the devastation brought on by the pandemic. With America increasingly polarized, many people who are out of work and supported the president before the pandemic still view the president favorably.