Economic Sentiment Unchanged As Consumers Digest Mixed Economic Signals

Overall economic sentiment was unchanged over the past two weeks, as consumers digested an array of differing economic indicators. The HPS-CivicScience Economic Sentiment Indicator (ESI) remained at 42.5.

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While overall economic sentiment remained the same since last period, the ESI’s five constituent indicators did make moves. Confidence in personal finances rose 2.1 points to 57.4. Meanwhile, confidence in the overall U.S. economy declined 1.3 points to 36.7.

Consumers are seeing mixed economic signals and raising questions surrounding the impact inflation and the Delta variant. Consumer spending is still outpacing pre-pandemic levels: JPMorgan Chase debit and credit card spending, for example, is currently 18-19% higher than 2019 levels. Yet the economy also faces a variety of potential headwinds; some employees are seeing wage increases get eaten up by inflation, while many businesses are reworking Labor Day return-to-work plans because of Delta variant fears. Here is how the ESI’s other indicators moved:

– Confidence in finding a new job declined 0.8 points to 56.2

– Confidence in making a major purchase declined 0.1 points to 31.6

– Confidence in the housing market rose 0.2 points to 30.6

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The ESI’s three-day moving average began at 43.4 on September 1, remaining largely flat before bottoming out at 41.8 on September 7. The moving average then rose over the second week and closed out at its high of 43.7 on September 14.

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The next release of the ESI will be Wednesday, September 29, 2021.

Economic Sentiment Nears Historic Low Set At Start Of Pandemic

Economic sentiment continued its decline over the past two weeks, with consumers expressing a particular lack of confidence in the overall U.S. economy. The HPS-CivicScience Economic Sentiment Index (ESI) dropped 0.4 points to 42.5, nudging closer to the all-time low of 40.1 reached in March 2020 when the COVID-19 pandemic hit the United States.

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Of the ESI’s five indicators, confidence in the overall U.S. economy fell the most over the past two weeks, dropping 2.5 points to 38.0—down 18.6 points from the 2021 high reached in March. The drop comes as the Delta variant continues to make its presence felt nationally and globally. Restaurant dining, office occupancy, and airline travel all saw declines in recent weeks compared to earlier this summer. Concerns about inflation, meanwhile, show no signs of letting up: The PCE Index was up 4.2% in the 12 months ended July 2021, the highest rate since 1991. The ESI’s other indicators made the following moves:

– Confidence in personal finances dropped 1.7 points to 55.3

– Confidence in making a major purchase dropped 0.8 points to 31.7

– Confidence in the housing market rose 2.1 points to 30.4 but remains near all-time lows

– Confidence in finding a new job rose 0.5 points to 57.0

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The ESI’s three-day moving average began the two-week stretch on August 18 at 42.4. It remained fairly stable before reaching its two-week low of 41.3 on August 24. Then it recovered and closed out the week at its high of 43.6 on August 31.

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The next release of the ESI will be Wednesday, September 15, 2021.

Consumer Confidence Hits Lowest Point Since April 2020

Over the past two weeks, economic sentiment slumped to its lowest reading since April 2020, with the HPS-CivicScience Economic Sentiment Index (ESI) declining 2.3 points to 42.9. Overall confidence in the U.S. economy sank dramatically, driving the decline along with record-low confidence in the housing market and near record-low confidence in making a major purchase.

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After a slight nudge upward in the last reading, economic sentiment returned to its downward summer trend as the Delta variant surged around the country. Confidence in the U.S. economy plummeted 6.1 points to 40.5, the lowest reading since October 2019. Housing market confidence slid 0.7 points to a record low of 28.3, as home prices continued to soar. As inflation continues to pick up, consumers are quickly losing confidence about making a major purchase, with confidence falling 3.8 points to the second-lowest reading in ESI history, 32.5. Despite a strong July jobs report, labor market sentiment also fell, dropping 2.1 points to 56.5. The only indicator to rise was personal finances, increasing 1.4 points to 57.0.

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The three-day moving average began on August 4 at 42.7 and oscillated for the two-week period, reaching its high of 44.9 on August 9 and closing at 44.1 on August 17.

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The next release of the ESI will be Wednesday, September 1, 2021.

Economic Sentiment Nudges Upward

Economic sentiment eked out a positive gain over the past two weeks, amid questions surrounding inflation, vaccination rates, and new mask mandates. The HPS-CivicScience Economic Sentiment Index (ESI) added 0.2 points, driven mostly by a recovery in sentiment towards making a major purchase.

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The ESI’s five indicators diverged substantially over the past two weeks. Making the biggest positive jump was confidence in making a major purchase, which rose 3.3 points to 36.3. The biggest decline, meanwhile, came in confidence in personal finances, which dropped 1.9 points to 55.6. American workers are benefitting from higher wages as the job market remains tight, yet the past few weeks raised new questions surrounding the impact of the COVID-19 Delta variant; companies including Apple and Google announced plans to push back return-to-work dates, while cities including Washington, DC reintroduced indoor mask mandates. The ESI’s other indicators made the following moves:

– Confidence in the overall U.S. economy rose 0.7 points to 46.6.

– Confidence in the housing market remained unchanged at 29.0.

– Confidence in finding a new job dropped 0.9 points to 58.6.

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The ESI’s three day rolling average began at 42.7 on July 21, dropping quickly to its two-week low of 41.8 on July 22. It then gradually rose, reaching its two-week high of 46.6 on July 27, before dropping, recovering again, and closing out the two-week stretch at 44.6 on August 3.

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The next release of the ESI will be Wednesday, August 18th.

Consumer Confidence Slumps To 2021 Low Amid Spending Reluctance

Economic sentiment fell to its lowest point so far in 2021, as the HPS-CivicScience Economic Sentiment Index (ESI) dropped 2.8 points to 45.0. Amidst a surge in inflation worries, confidence in making a major purchase and confidence in the housing market drove a significant decline.

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After briefly reversing in the last reading, the months-long divergence between confidence in big-ticket purchase indicators and confidence in finding a new job once again entrenched itself over the past two weeks. Confidence in making a major purchase dropped 6.2 points to 33.0, the biggest single decline since the March 31, 2020 reading, while confidence in the housing market dropped 3.9 points to 29.0. Confidence in finding a job was the only indicator to rise over the past two weeks: It jumped 1.1 points to 59.5. Consumers reported record complaints about inflation on big ticket purchases, while the average home loan reached a new record high of $392,370. The other indicators to fall were:

– Confidence in personal finances dropped 2.6 points to 57.5.

– Confidence in the overall U.S. economy dropped 2.5 points to 45.9

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The three-day moving average began on July 7 at its high of 47.9, dropping gradually to its low of 43.4 on July 19 before closing out the week at 43.7 on July 20.

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The next release of the ESI will be Wednesday, August 4, 2021.