Growing consumer optimism for the next six months could bode well for retail and apparel firms.
But their appraisal of current conditions has been tempered by the coronavirus pandemic. The Conference Board on Tuesday said its Consumer Confidence Index increased to 89.3 in January, up from 87.1 in December. Of the two components of the Index, the Present Situation Index fell to 84.4 from 87.2, while the Expectations Index rose to 92.5 from 87.0.
“Consumers’ appraisal of present-day conditions weakened further in January, with COVID-19 still the major suppressor,” Lynn Franco, senior director of economic indicators at The Conference Board, said. “Consumers’ expectations for the economy and jobs, however, advanced further, suggesting that consumers foresee conditions improving in the not-too-distant future. In addition, the percent of consumers who said they intend to purchase a home in the next six months improved, suggesting that the pace of home sales should remain robust in early 2021.”
Consumers have a reason to be upbeat.
President Biden on Tuesday purchased 200 million more vaccine doses. “We now have a national strategy to beat Covid-19. It’s comprehensive. It’s based on science, not politics,” he said, noting that the additional doses mean 300 million people in the U.S. could be vaccinated by early fall.
Currently, the U.S. has approved vaccines from Pfizer/BioNTech and Moderna. The purchase includes 100 million more doses from each company, bringing the total vaccine doses to 600 million from the existing supply of 400 million.
On Friday, the European Union approved the vaccine formulated by AstraZeneca. Johnson & Johnson, whose vaccine requires just a single dose versus the two required by the other manufacturers, said its solution could also become available soon.
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Meanwhile, some states are also loosening social distancing restrictions that were put in place following the holiday surge in December.
On Friday, New York Gov. Andrew Cuomo said that indoor dining can resume on Feb. 14, with restaurants at 25 percent capacity, but must close by 10 p.m. Restaurants currently are limited to outdoor dining and takeout and delivery.
New York’s move to ease restrictions followed California Gov. Gavin Newsom on Monday lifting stay-at-home orders in the state, allowing salons to reopen and retailers to accommodate more in-store shoppers. Residents are still asked to wear masks and maintain six-foot distances.
Meanwhile, the Biden administration is moving to get support for the president’s “American Rescue Plan,” a broad $1.9 trillion stimulus package that includes a $15 national minimum wage and Paycheck Protection Program to help small businesses.