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Consumer sentiment lukewarm in the southern United States as COVID-19 cases increase


WASHINGTON (Reuters) – Consumers in southern US states where COVID-19 infections reached record levels after authorities rushed to reopen businesses were less optimistic about economic conditions in June than residents areas that proceeded with more caution and followed the advice of health experts.

The University of Michigan said on Friday that its measure of consumer sentiment rose only 0.5 points among southern residents in June. Southern states, including Texas, South Carolina and Florida, which reopened in mid-May, report an increase in respiratory illnesses.

Texas Governor Greg Abbott on Friday ordered the bars closed and restaurant services cut.

“While most consumers believe that economic conditions could hardly worsen following the recent closure of the national economy, the potential growth of the economy is more closely linked to progress against the coronavirus,” said Richard Curtin , chief economist at the University of Michigan Surveys of Consumers.

“The rapid reopening of the economy has undoubtedly restored jobs and income, but it has come at the likely price of a slight increase in the spread of the virus.”

In the West, where coronavirus infections have also surged despite quick measures to slow the spread of the disease, consumer sentiment rose 3.3 points in June.

On the other hand, the sentiment of residents of the Northeast climbed to a record 19.1 points this month. State and local governments in the Northeast are gradually re-opening their savings while monitoring COVID-19 infections and hospitalizations.

Curtin attributed the surge of confidence to “residents who apparently expected later and more gradual reopening to produce a negligible increase in infections at worst.”

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He predicted that the resurgence of the virus would reduce consumer demand in the southern and western regions and could even temper spending in the northeast.

The survey also found that consumer confidence in government economic policies fell to its lowest level in June since President Donald Trump took office in January 2017.

https://s1.reutersmedia.net/resources/r/?m=02&d=20200626&t=2&i=1523776088&w=1200&r=LYNXMPEG5P1O2

Source: Reuters

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