December 11th the University of Michigan released data that the initial value of the U.S. consumer confidence index unexpectedly rose to 81.4 in December, exceeding market expectations, but still far below the pre-epidemic level.
The analysis believes that the latest data may reflect people’s expectations for vaccines, but because the epidemic in the United States is still worsening, vaccines are difficult to produce significant results in at least the short term, and Congress is still deadlocked on the new round of relief measures.
These factors have left consumers’ outlook for their own financial situation basically unchanged, indicating that The coming end-of-year consumption season is not optimistic.
Consumer financial situation has not improved.
According to data released on December 11, the initial value of the University of Michigan’s consumer confidence index rose to 81.4 in December, up 4.5 points from the November final value of 76.9, which exceeded market expectations of 76.
Although the data rose to the second highest level since the outbreak of the epidemic, it is still far below the level of about 100 before the epidemic, indicating that there is still a long way to go before consumer confidence fully recovers.
Bloomberg analyzed that the recovery of consumer confidence may reflect optimistic expectations for the progress of the vaccine, which is expected to lead to the loosening of epidemic prevention measures and the return of normal life.
But even so, the epidemic is still spreading in the United States, the number of new confirmed cases and deaths is hitting a new high, the vaccine is difficult to produce significant results in at least the short term, and Congress is still deadlocked on a new round of relief measures, which constitute negative factors.
In this context, the survey conducted from November 23 to December 9 found that although the perception of the long-term outlook has improved significantly, the outlook of consumers on their own financial situation has remained largely unchanged.
Richard Curtin, chief economist of the University of Michigan Consumer Survey, pointed out that the recovery of confidence in early December was related to judgments on the long-term economic outlook, but the outlook for the short-term economy and personal finance remained basically unchanged.
As four years ago, the expected shift caused by the rotation of political parties after the election is too extreme to justify economic fundamentals.
Curtin expects that the loss of employment and revenue due to the shutdown of enterprises and the business blockade will worsen, and the long waiting process will make the winter worse before most consumers can get the vaccine.
Although a new round of relief measures will prevent households, small businesses and local governments from receiving greater economic harm, even if it can be passed immediately, it will take at least a month for the funds to reach the hands of those in need, and many people will spend the holiday spending season at the end of this year in pain.
In addition, with the recurrence and saw-of-war relief negotiations, millions of Americans may start the new year without any unemployment benefits if the rescue agreement is not reached by the end of the year, which will seriously undermine their willingness and ability to consume.
The end of the year consumption season is not optimistic.
In the face of the worsening of the epidemic, the November retail sales data released on December 16 in the United States are an important reference indicator for observing the U.S. consumer market.
According to data previously released by the U.S. Department of Commerce, retail sales in the United States increased by 0.3% in October compared with the previous month, which slowed down significantly from 1.6% in September and also fell below market expectations of 0.5%. Several sales categories, including clothing stores, sports goods stores and department stores, recorded declines in retail sales.
With millions of Americans still unemployed and most of the previous bailout funds used up, weak retail sales in the United States are not surprising.
But what economists are really worried about the weak data in October is that it basically reflects the situation before the current round of epidemic worsening. In other words, the real weakness may still be ahead.
According to the analysis of the Wall Street Journal, from the current epidemic situation, the upcoming November retail sales data are not optimistic, which makes the outlook of many retailers dim.
Worse, those holiday promotions launched early in October may have boosted consumer demand that should have appeared in November and December ahead of time, “overdrawn” some of the purchasing power, making the consumption season at the end of this year even more unoptimistic.
At the same time, the uncertainty of the U.S. Congress’s introduction of a new bailout bill before the end of the year remains. Even if stimulus funds are approved, it is too late for the end of the consumption season to reach consumers before the end of the holiday shopping season.
Some analysts worry that for small retailers who are already hit hard by the epidemic, they may have difficulty holding on until next year.
The outlook for retailers is bleak.
For the upcoming end-of-year shopping season, many analysts believe that the situation may be similar to that around Black Friday. People will no longer see people driving in long lines to shopping malls late at night and rushing into stores with the sound of zero o’clock. Instead, traditional consumption habits have been forced to change, and purchasing power continues to turn online. Move.
During the epidemic, many people have some scruples about going to crowded shops.
Institutions, including the Centers for Disease Control and Prevention, have also listed activities such as influxing stores as high-risk activities during the epidemic, persuading consumers to change their traditions and stay at home and buy online as much as possible.
In fact, affected by the epidemic that has lasted for nearly a year, the habits of American consumers and the sales patterns of merchants have quietly changed.
“The pandemic has both health concerns and financial strains, leaving consumers and retailers reprogramming holiday shopping,” said Rod Said Seitz, vice chairman of consultancy Deloitte and head of retail wholesale operations in the United States.
For merchants, only by innovating the sales method can consumers be more enthusiastic about consumption, thus making up for the losses of physical stores. But any commercial transformation is always accompanied by great pain.
As Patrice Luway, CEO of clothing brand Ralph Lauren, worries, the worsening epidemic has led to stricter business restrictions in many areas, which will further hit retail at the end of the year, while some in a weak position. Businessmen may be forced to join a vicious price war, which will directly affect the survival of enterprises.
Under the rampant epidemic, commercial sales are weak, corporate profits are meagre, and a “bankruptcy tide” is inevitable. Ed Atman, a financial scientist who studies corporate bankruptcy, believes that some economic indicators indicate that businesses and households of all sizes in the United States may have another “bankruptcy wave” next year.
Although the bankruptcy rate has declined in the past few months, the reason is related to the stimulus policies of the Federal Reserve and the government. By policy, it is not a long-term solution. Without improving economic fundamentals and consumer financial financials, it is difficult for business sales to really improve.