U.S. consumer sentiment unexpectedly fell in early February amid growing pessimism about the economy among households with annual incomes below $75,000, even as the government is poised to deliver another round of COVID-19 relief money.
The ebb in sentiment reported by the University of Michigan on Friday was also despite a decline in new coronavirus cases and an improvement in the distribution of vaccines. It underscored the so-called K-shaped recovery, where better-paid workers are doing well while lower-paid workers are losing out.
The government provided nearly $900 billion in additional fiscal stimulus in late December, which included direct cash payments to mostly lower-income households and an extension of a weekly unemployment supplement. The U.S. Congress is working on President Joe Biden’s proposed $1.9 trillion recovery plan, which would see more stimulus checks sent to poor families.