The economic toll of the coronavirus pandemic hit home for Americans last month, as consumers braced for job losses, anticipated spending cuts and grew more pessimistic about their ability to cover their bills, according to data released by the Federal Reserve Bank of New York on Monday.
Expectations worsened dramatically throughout the month, with concerns growing after the first death from COVID-19 in the United States and after the World Health Organisation officially declared a pandemic and more drastic steps were taken to limit the spread of the disease.
Much of the fear was centered around job security, with more people fearing job losses as a growing number of non-essential businesses shut down across the country and residents were asked to stay at home.
Expectations that the unemployment rate will be higher one year from now increased to an average 50.9 per cent in March - the highest since the survey launched in 2013 and up from 34.2 per cent in February. The odds of leaving a job voluntarily over the next year dropped to 20 per cent in March from 22.2 per cent in February.
The chances of losing a job in the next 12 months increased to 18.5 per cent, up nearly 5 percentage points from February and another series high. The rise in fears about losing a job was "broad based" and noted by workers across levels of education, the survey found. Those with a college degree reported the largest increase, making them as nervous about becoming unemployed as those with less education, the findings show.
Consumers became less confident in their chances of finding a new job after being laid off, with the mean perceived probability of finding a job dropping to 53.0 per cent in March from 58.7 per cent in February.
Americans also became more concerned about their ability to access loans or to keep up with existing debt payments. Some 38.8 per cent of households said they expect it will become more difficult for them to access credit over the next 12 months, compared to 28.3 per cent in February. The perceived chances of missing a minimum debt payment over the next three months increased to 15.1 per cent, above the 12-month trailing average of 11.6 per cent.
The survey of consumer expectations is a monthly poll based on a rotating panel of 1,300 households. The survey was conducted March 2 to March 31.