Consumers feel the crunch as COVID-19 outbreak spreads

by Mark Rosanes23 Mar 2020

The coronavirus outbreak has triggered unprecedented economic challenges, and most Americans are feeling the effects financially, a recent LendingTree survey revealed.  

According to the survey, 63% of respondents agreed that the COVID-19 pandemic has impacted their personal finances. Four in 10 said their paychecks have been affected negatively, with the figures jumping to 51% and 44% for employed Gen-Z and millennials, respectively. 

Forty-four percent of those surveyed said they are concerned about their ability to pay rent or their mortgage as a result of the coronavirus pandemic.   

Consumers are also worried about their monthly credit bills (23%) and the cost of medical treatment should they contract the coronavirus (17%). 

The results point to recession fears as the financial instability could lead to stunted consumer spending, according to Tendayi Kapfidze, chief economist at LendingTree. 

"The changes in consumer behavior will likely lead the US into recession," said Kapfidze. "After an initial boost in consumption due to preparation, spending is set to contract sharply as broad sectors of the consumer economy shut down," he said. 

LendingTree conducted the online survey of 1,050 Americans on March 13, before Fannie Mae, Freddie Mac and the Department of Housing and Urban Development announced that they would suspend foreclosures and evictions due to the COVID-19 outbreak.