What a difference a quarter makes during the time of a pandemic.
In January, consumer sentiment about the U.S. economy was at its highest — 56 percent, since LIMRA began tracking the metric in 2008. Three months later and nearly a month since the first states started imposing shelter-in-place orders and shuttering many businesses, just 25 percent of Americans have a favorable view of the economy, according to LIMRA’s latest quarterly consumer sentiment study.
“Uncertainty about the coronavirus pandemic undercut the economic growth we have experienced over the past several years,” says Alison Salka, senior vice president and research director for LIMRA. “Consumers are not only worried about their health and well-being and the health and well-being of family and friends, but they are also worried about the economic impact this will have on them now and in the future.”
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Two in three of the 3,000 U.S. adults that LIMRA surveyed are very or extremely concerned about how COVID-19 may impact one or more specific financial issues: their ability to work in the short-term; job security in the long-term; short-term financial security; and long-term financial security.
Seven in 10 of the respondents are worried about the economic impact of coronavirus and how long it will last, with 71 percent believing the U.S. economy is likely or extremely likely to enter a recession this year.
Many respondents believe a recession would strongly or very strongly impact their financial activities. Half say this about their ability to save for a major expense; for retirement, for an emergency fund, and their ability to have something leftover for discretionary spending.
Three-fourths of respondents suspect a recession would have also some impact on their ability to meet their insurance needs, with 58 percent saying a recession could make it difficult to buy new coverage they need. Drilling down by type of insurance, 34 percent say this regarding health insurance; life insurance (24 percent); property-casualty insurance (19 percent); and disability insurance (8 percent).
Similarly, 57 percent of the respondents say a recession could make it difficult to pay for existing insurance coverage. Drilling down, 35 percent say this regarding their existing health insurance; life insurance (33 percent); property-casualty insurance (32 percent); and disability insurance (25 percent).
Beyond the financial impact, COVID-19 is disrupting many of the respondents’ lives. Thirty-nine percent say that social distancing has demanded significant lifestyle changes and another 34 percent say they have made moderate lifestyle changes. More than a third of the respondents believe they will have to practice social distancing for one to two months and more than a quarter (27 percent) think it will last more than two months.
“We are in a unique situation where the economic downturn is not necessarily the primary concern for consumers,” Salka says. “Our research confirms that a significant portion of the population is worried about their physical and mental health and access to medical care and basic necessities.”
Among the respondents’ top personal concerns prompted by the coronavirus outbreak are:
- Family and friends in high-risk categories (59 percent)
- Children’s schooling education for those with children under age 23 (54 percent)
- Access to medical care (45 percent); physical health (43 percent) access to food and other necessities (40 percent); and mental health (35 percent).
Two-thirds (66 percent) are concerned about whether the U.S. health care system is prepared for and capable of handling the influx of patients; six in 10 are worried about the federal government’s ability to manage the crisis; more than half are worried about their state/local government’s ability to manage the crisis; and half are concerned about the overall societal impact this event will have.