US consumer sentiment 'quite high' despite coronavirus, University of Michigan says

Consumer confidence in the States edged up in February to within a whisker of its previous high for the current economic cycle, despite signs that the coronavirus was beginning to register on Americans' list of concerns.

The University of Michigan's headline consumer confidence index rose from a reading of 99.8 for January to 101.0 in February (consensus: 100.7).

It was last highest in March 2018, when it reached 101.4.

A sub-index of consumer expectations meanwhile improved from 90.5 to 92.1 and that tracking their perception of current economic conditions from 114.4 to 114.8.

Only 8% of those surveyed mentioned the virus in their responses, survey director Richard Curtin said.

But "on Monday and Tuesday of this week, the last days of the February survey, 20% mentioned the coronavirus due to the steep drop in equity prices as well as the CDC warnings about the potential domestic threat of the virus," Curtin said.

He continued: "While too few cases were conducted to attach any statistical significance to the findings, it is nonetheless true that the domestic spread of the virus could have a significant impact on consumer spending."

Nonetheless, it appeared to only be having a modest impact on attitudes thus far, he added, explaining that even among those consumers who mentioned it, sentiment remained "quite high".

"Panic is best avoided by a strong sense of confidence in the government’s responses that aim to control the potential spread of the virus and limit any resulting damage to the economic welfare of consumers.

"The most effective fiscal and monetary policies include proposed reactions to the virus that are transparent, well understood, and act to maintain confidence in government economic policies close to its nearly two-decade high."