Coronavirus Outbreak Sends Consumer Expectations Plummeting

Armantier, Olivier; Koşar, Gizem; Pomerantz, Rachel; Skandalis, Daphne; Smith, Kyle; Topa, Giorgio; Van der Klaauw, Wilbert

Discussion Paper

Coronavirus Outbreak Sends Consumer Expectations Plummeting

Abstract: The New York Fed’s Center for Microeconomic Data released results today from its March 2020 Survey of Consumer Expectations (SCE), which provides information on consumers' economic expectations and behavior. In particular, the survey covers respondents’ views on how income, spending, inflation, credit access, and housing and labor market conditions will evolve over time. The March survey, which was fielded between March 2 and 31, records a substantial deterioration in financial and economic expectations, including sharp declines in household income and spending growth expectations. As shown in the first two columns of the table below, the median expected year-ahead growth in income and spending declined from 2.7 percent and 3.1 percent in February to 2.1 percent and 2.3 percent in March, respectively. Similarly, expectations about home price growth plunged from 3.1 percent in February to 1.3 percent in March. The March reading for one-year home price growth expectations came in about 1.4 percentage points below the previous low for the series, which stretches back to June 2013.

Keywords: expectations; COVID-19;

JEL Classification: D84; I1;