US consumers' confidence and responses to COVID-19 shock

Suzanna Elmassah, Shereen Bacheer and Eslam Hassanein

Review of Economics and Political Science, 2022, vol. 8, issue 3, 186-207

Abstract: Purpose - This research's main objective is to investigate the relationship between consumption expenditure and consumer confidence in the USA and to study their effects on US economic revivalism during and after the coronavirus disease 2019 (COVID-19) shock. Design/methodology/approach - The authors use Michigan's monthly Consumer Sentiment Index and its five components from January 1978 to April 2020. The study is unique in quantifying the potential variations in US consumer confidence due to COVID-19 under different scenarios, by providing a projection until December 2021. It also estimates the time needed for recovery and offers guidance to policymakers on ways to contain the negative impacts of COVID-19 on the economy by restoring consumer confidence. Findings - All scenarios show a gradual recovery of consumer confidence and consumption expenditure. This study recommends expansionary policies to encourage consumption expenditure to generate additional demand and boost economic growth and job creation. Practical implications - Though this study is limited to the US consumer confidence index, it offers significant implications for marketers, customers and policymakers of other developed economies. The authors recommend expansionary economic policies to boost consumer confidence, raise economic growth and result in job creation. Originality/value - The study is unique in quantifying the potential variations in US consumer confidence due to COVID-19 under different scenarios; by providing a projection until December 2021. It also estimates the time needed for recovery and guidance for policymakers on ways to contain the COVID-19 shock negative impacts on the economy by restoring consumer confidence.

Keywords: Consumer confidence; COVID-19; Recovery; USA; Shocks; Pandemic (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:repspp:reps-10-2021-0098

DOI: 10.1108/REPS-10-2021-0098

Access Statistics for this article

Review of Economics and Political Science is currently edited by Dr Heba Nassar

More articles in Review of Economics and Political Science from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().