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Consumers are more hopeful about the future, but they are more worried about the record increase in coronavirus cases .
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The numbers: A measure of consumer confidence fell in early November to a three-month low, reflecting worries about the record rise in coronavirus cases and Republican disappointment over President Trump’s election loss.
The first of two readings on consumer sentiment in November fell to 77 from 81.8 in October, the University of Michigan said Friday.
It was the lowest reading since August and fell well short of the 82.3 MarketWatch forecast.
“The outcome of the presidential election as well as the resurgence in Covid infections and deaths were responsible for the early November decline,” said Richard Curtin, chief economist of the survey.
Read: U.S. jobless claims fall to pandemic low of 709,000
What happened: An index that measures current conditions barely declined, to 85.8 from 85.9.
The biggest change in sentiment came in how Americans view the next six months. An index that measures future expectations fell even more sharply to 71.3 from 79.2.
The latest survey also showed a strong partisan divide again — as it’s done throughout Donald Trump’s presidency.
Optimism among Democrats rose sharply ahead of the election in anticipation that Joe Biden would prevail. Yet even though the former vice president won in a tighter context than expected, the exploding number of COVID-19 cases dampened enthusiasm among Democrats
Republicans had been more optimistic throughout the Trump era, but their confidence declined sharply after the election, the survey showed.
Now the positions of Democrats and Republicans have flipped.
Read: Biden to talk more diplomatically toward China, but keep Trump’s big tariff ‘stick’
Big picture: Americans had grown more optimistic about the economy and their own finances since the end of summer, but the record rise in coronavirus cases recently threatens to undermine their confidence just as it did during the last spike in cases in the late spring.
Some states are also imposing new rules or recommendations on staying at home that could hurt workers and businesses just before the holiday shopping season, a potential blow to the economic recovery.
The good news? The economy has weathered the latest viral outbreak pretty well so far. States have avoided full-blown lockdowns and businesses are finding ways to protect workers and customers from the virus. The rise in cases appears to have been triggered large from social interactions.
What they are saying? “This report captures the impact of the election on Republicans, while the joy — presumably — felt by Democrats appears to have been offset by other factors, of which the surge in Covid infections and hospitalizations is the prime candidate,” said chief economist Ian Shepherdson of Pantheon Macroeconomics.
“With the numbers worsening by day, we expect all measures of consumers’ sentiment to deteriorate over the next couple months, at least,” he added.
Read: The cost of living — aka inflation — unchanged in October
Market reaction: The Dow Jones Industrial Average DJIA, +0.94% and S&P 500 SPX, +0.89% rose in Friday trades. Stocks fell on Thursday on worries that the record increase in coronavirus cases will hurt the economy again.
