Coronavirus vaccine boosts consumers' economic outlook for December
- The distribution of a US coronavirus vaccine helped improve consumer outlook in December—a hopeful sign for retailers amid the holiday season.
- However, distribution efforts are likely to further overwhelm delivery systems.
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University of Michigan's Surveys of Consumers shows that consumer attitude toward December's economic condition was up 5.5% month over month but down 20.5% compared with December 2019, per PYMNTS.
The majority of early December gains were driven by a more positive long-term economic outlook, according to Richard Curtin, chief economist for the University of Michigan's Surveys of Consumers. Curtin attributed this rosier outlook to a skew in political views based on presidential election outcomes as well as the release of positive vaccine trial results.
While a US vaccine launch helped boost consumer sentiment, its release may worsen an already strained delivery system amid the holiday season. The US started distributing the long-awaited coronavirus vaccine on December 14.
But with vaccine distribution relying on the major US delivery carriers, it's likely that holiday shipments may understandably come second—potentially further delaying orders beyond the upcoming December holidays. This comes amid USPS releasing a public statement regarding its backlog of holiday shipments and UPS limiting daily shipments from major retailers.
Nonetheless, retailers are likely to benefit from a widespread vaccine launch and consumer sentiment improvement.
- Despite likely delays in holiday orders, there could be a boost in holiday consumer spending as a result of vaccine news. Consumer spending hit a bump in the road in October after seeing steady results throughout the summer months: US spending grew just 0.5% monthly in October after seeing 1.2% monthly growth in August and September. October results could likely be attributed to the coronavirus pandemic, as consumers braced themselves for more cases going into the winter months. But now, with vaccine distribution underway, consumers might feel more confident spending during the holiday season since economic standing is likely to improve as the pandemic phases out.
- There could be further spending recovery into early to mid-2021 as the effects of vaccine distribution begin to take effect. This could lead to increased consumer spending due to economic improvements beyond the 2020 holiday season, as the vaccine hopefully continues to become widely available for the US population. Long-standing coronavirus restrictions may ease up and sectors of the economy could begin to open up again. This may lead to decreased unemployment and, in turn, increased consumer spending. This boost in spending could help retailers as well as the payment providers that support them record transaction volume recovery.
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