While Goldman may be confident that the worst is over for the US economy, which is now "through the trough"...
... it is an different question entirely how long it will take before things return to normal, and according to the latest consumer confidence survey conducted by Bank of America, the recovery will be long, hard and very painful.
According to a report from BofA's economist team, the bank's US Consumer confidence index (USCCI) dropped from 43.4 to a new low of 42.8 on May 11. The details show that consumers are increasingly pessimistic on the current outlook, as the current conditions index fell from 36.0 to 34.5, while the expectations index increased from 50.8 to 51.1.
Consumers are still quite gloomy about current conditions given the incredibly weak labor market, which is concerning in light of the massive fiscal stimulus and moves toward reopening has created greater confidence about the future.
BofA found that COVID-19 directly affected the job status for 52% of survey respondents. Of those who were affected, 29% were laid off, 19% had their hours or pay reduced and 18% were furloughed.
Moreover, Millenials recorded the greatest share of layoffs by generation...
... and low income workers were much more adversely affected than middle and high income workers.
To help offset lost wage income, Congress, amongst other actions, sent out one time stimulus checks to households. Of those who received the checks, most planned to spend it on necessary items: bills, debt, or food and groceries.
In theory, these checks should provide temporary help to those whose job status were affected most by the virus, in practice, the process has been riddled with delays and errors.
That said, there has been some modest improvement in BofA's suite of high frequency indicators, as 37 states have begun to reopen. Specifically, BofA is seeing an uptick in dining out, greater mobility and fewer businesses closed. This ties into the modest improvement in the bank's internal card data. That said, the majority of people are concerned about the virus, and according to a survey from CivicScience 69% would not resume all normal activities after states lift stay-at-home orders. This underscores not only the nature of the crisis, but what we said at the top: until the virus is under control, the economic recovery will take a very long time.