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American Optimism Highest Since Start of Pandemic

March 29, 2021

As the rollout of COVID-19 vaccines continues, Americans are now feeling the most upbeat about the economy than at any other point since the start of the pandemic, according to the Consumer Sentiment Index produced by the University of Michigan. The housing market also likely will continue to surge, economists predict. Pandemic-era housing protections also are giving consumers a reason to look favorably on housing, as the Centers for Disease Control and Prevention announced Monday that it is extending its national eviction moratorium through June 30.

The index has increased to 84.9 points, from 83 earlier in the month. Economists note that seldom does an index show such a big improvement in the same month, MarketWatch reports. More stimulus checks, job growth, and vaccine doses are helping to boost optimism. However, the consumer sentiment index still remains about 16 points below its pre-pandemic peak.

Also, Americans’ attitudes about their personal finances and the economy are at a one-year high. “We expect attitudes will continue to rebound as the pandemic wanes and economic activity normalizes over the coming months,” Mahir Rasheed, associate economist with Oxford Economics, told MarketWatch.

Last week, jobless claims dropped to below 700,000, the lowest level since the pandemic began, the U.S. Bureau of Economic Analysis reported. Thirty-two states reported a decrease in claims for the week ending March 20. Some of the largest claim decreases week over week occurred in Illinois (–79%), New Hampshire (–63%), and Arkansas (–41%).

Meanwhile, home sales continue to soar, although they’d likely be higher if it wasn’t for severely limited inventory, NAR reports. Lawrence Yun, NAR’s chief economist, predicts this year’s home sales will eclipse last year’s. “With more COVID-19 vaccinations being distributed and available to a larger share of the population, the nation is on the cusp of returning to a sense of normalcy,” Yun says. “Many Americans have been saving money, and there’s a strong possibility that once the country fully reopens, those reserves will be unleashed on the economy.”

Source: 
Americans Are the Most Upbeat Since the Pandemic, Consumer Sentiment Survey Shows,” MarketWatch (March 26, 2021) and “Jobless Claims Dropped to the Lowest Level Since the Pandemic Started,” National Association of REALTORS® Economists’ Outlook blog (March 26, 2021)