Consumers at least have gotten over that sinking feeling.
Consumer confidence held its ground this month after sharp declines in March and February as the coronavirus disrupted American life and pushed unemployment up to 14.7 percent.
The Conference Board’s Consumer Confidence Index inched up to 86.6 from 84.7 in April — steady but still way below the 130.7 registered in February.
Shoppers are still feeling better about the future than the present. The measure of consumer confidence is based on a monthly survey and made up of two parts, the Present Situation Index (which fell this month to 71.1 from 73), and the Expectations Index (which rose to 96.9 from 94.3 in April).
“Following two months of rapid decline, the free fall in confidence stopped in May,” said Lynn Franco, senior director of economic indicators at The Conference Board.
But the road ahead still looks bumpy.
“Consumers remain concerned about their financial prospects,” Franco said. “In addition, inflation expectations continue to climb, which could lead to a sense of diminished purchasing power and curtail spending. While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads.”
The job market is broadly seen as the single biggest factor driving consumer spending and has taken a body blow in the COVID-19 crisis with 38.9 million people applying for unemployment benefits over nine weeks.
Retailers and other businesses are starting to pick themselves back up and reopen as social distancing restrictions ease, but business is only coming back slowly.
Already, Neiman Marcus Group, J.C. Penney Co. Inc., J. Crew Group and others have filed for bankruptcy. The question is whether the economic engine can restart soon enough to keep others from following.
Regardless, everyone is settled in for a slow climb back. Macy’s on Tuesday unveiled a refinancing plan that, if it goes through, would ensure the company could meet its debt payments for two years.