Richard Curtin, director of the University of Michigan’s Survey of Consumers, worries the cumulative effect, especially on younger generations, could compare to the devastating impact in the 1930s had on the psychology of Americans.

“The Great Depression affected people their whole lives, and that could be true now for millennials,” he said.

There’s also an additional layer this time. This crash was triggered by a virus that, itself, can kill. How that will affect consumption is unclear. Early signs from economies that are already re-opening, and from surveys of consumer attitudes, don’t look promising.

Psychological Impact
Data from China, where the virus appeared first and where many restrictions have been relaxed, point to a slow recovery of consumer spending, according to a note from economists at HSBC Bank in London. And in Sweden, though bars and restaurants have remained open throughout the contagion, patrons have largely stayed away.

Polling by YouGov showed 57% of Americans were “very” or “somewhat” scared they might contract the virus. Among 26 countries surveyed since April 24, the average was 62%, with only Finland below 40%.

“The psychological impact of risk aversion setting in cannot be understated,” HSBC’s James Pomeroy and Fabio Balboni wrote in their May 1 note. “Until people feel safe returning to places where large crowds are prevalent -- such as public transport, bars, restaurants and many recreational venues -- consumer spending in this part of the economy is likely to remain subdued.”

In the U.S., industry groups are making a big effort to help boost confidence. Groups like the National Restaurant Association are offering extensive guidelines, often in conjunction with government agencies like the Centers for Disease Control and Prevention, on how businesses should go about re-opening.

At Wright’s arcade in the Atlanta-area mall, he’s made every effort to keep his operation safe and reassure customers. The pinball machines and other games are spaced farther apart. Staff wear masks and gloves and add their own constant cleaning efforts. But he’s resigned to a slow return of his clientele.

“This might take a long, long time for people to feel comfortable again,” he laments.

Curtin, who conducts monthly surveys on consumer behavior, expects companies will have a hard time reassuring people because risks trigger an emotional response.