Staying alert for the consumer

Posted by: Paul Donovan

11 May 2020

Daily update

  • Economists are staying alert for signs of the consumer response to any easing of lockdowns. This depends on fear about job security, and fear about the coronavirus. Government support during lockdowns has given many people income to spend, if fear is not too significant.
  • The US unemployment data from Friday was as expected – the US administration is talking about unemployment possibly reaching 25%. (US unemployment is survey based, so it's less reliable). Although the US unemployment rate includes temporary unemployment, the equivalent of furloughed workers, there may be a confidence hit from signing on as unemployed as opposed to receiving furlough pay direct from your employer.
  • US Vice President Mike Pence has been isolated after coming into contact with a person with the virus. The UK has changed the color of its warning posters, from red to green. It has also announced some easing of lockdown. The German R rate of infection is reported to have risen above one. South Korea had a spike in infections associated with nightclubs, and China has sealed a city following infections.
  • European lawyers are squabbling over the ECB. Markets do not care too much as long as the ECB keeps buying bonds (which it will). Italian March industrial production data is due.

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