The coronavirus is raising alarm among consumers, the powerhouse of the US economy

AP Photo/Damian Dovarganes

• The coronavirus outbreak has increasingly raised alarm among American consumers, a key driver of growth in the US economy. 
• Consumer sentiment fell 0.6 points to 114.8 last week, according to a Morning Consult survey released Wednesday.
• Economists watch consumer sentiment closely because it can reflect how much households will purchase and borrow.
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The coronavirus outbreak has increasingly raised alarm among American consumers, a key driver of growth in the US economy. 

Consumer sentiment fell 0.6 points to 114.8 last week, according to a Morning Consult survey released Wednesday, near its levels at the beginning of 2020. Consumers were most worried about future business performance in the country and expectations for their own personal finances.

The reach toll of the coronavirus escalated sharply last week, leading to more costly restrictions on commerce and travel. The February 17-23 survey was taken before the Centers for Disease Control warned the respiratory illness, named COVID-19, would likely spread through communities in the US. 

Economists watch consumer sentiment closely because it can reflect how much households will purchase and borrow. Consumer spending has widespread effects on the US economy, accounting for more than two-thirds of activity.

The National Retail Federation said this week that it expected retail sales to increase at a healthy rate in 2020 despite the uncertainty from the coronavirus and the presidential election.

“There are always wild cards we cannot control like coronavirus and a politically charged election year,” said Matthew Shay, the president and CEO of the retail trade association. “But when it comes to the fundamentals, our economy is sound and consumers continue to lead the way.”