US consumer sentiment plunged the most on record in early April as coronavirus froze the economy

• The University of Michigan consumer sentiment index plunged by 18.1 points to 71 in early April, according to preliminary data released Thursday.
• The slide was led by the current conditions index, which plummeted by 31.3 points, nearly double the previous record decline of 16.6 points set in October 2008.
• "The free-fall in confidence would have been worse were it not for the expectation that the infection and death rates from covid-19 would soon peak and allow the economy to restart," said Richard Curtin, the Surveys of Consumers chief economist, in a statement.
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A key measure of US consumer sentiment posted its largest ever monthly drop in early April as coronavirus hurtled the economy into a deep freeze.

The University of Michigan consumer sentiment index plunged by 18.1 points to 71 in early April, according to preliminary data released Thursday. It marks the largest-ever monthly drop for the index. Over the last two months, the index has slumped 30 points, roughly 50% more than the previous record.

The slide was led by the current conditions index, which plummeted by 31.3 points, nearly double the previous record fall of 16.6 points set in October 2008. The other component of overall consumer sentiment, the expectations index, fell by 9.7 points. While the decline is still substantial, it was not near the record drop of 16.5 in December 1980.

"This suggests that the free-fall in confidence would have been worse were it not for the expectation that the infection and death rates from covid-19 would soon peak and allow the economy to restart," Richard Curtin, the Surveys of Consumers chief economist, said in a statement.

President Donald Trump extended federal social distancing measures through the end of April, but is now reportedly aiming to open as much of the economy as possible by that deadline.

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Still, data suggests it might be too optimistic to expect the US economy to quickly rebound after the coronavirus outbreak subsidies as there has been a wealth of damage. In just three weeks, nearly 17 million Americans have filed for unemployment insurance as layoffs persist.

The situation already has consumers looking for relief. Recent data show requests to suspend or reduce mortgage payments skyrocketed last month.

"Anticipating a quick and sustained economic expansion is likely to be a failed expectation, resulting in a renewed and deeper slump in confidence," Curtin wrote.

Going forward, consumers should be prepared for a "longer and deeper recession rather than the now discredited message that pent-up demand will spark a quick, robust, and sustained economic recovery," Curtin said.

He added: "Sharp additional declines may occur when consumers adjust their views to a slower expected pace of the economic recovery."

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