Consumer Sentiment Remains Near Historic Low

After a slight uptick last period, economic sentiment fell again over the past two weeks, declining 0.5 points to 40.5, according to the HPS-CivicScience Economic Sentiment Index (ESI). This reading marks the second-lowest in ESI history, following its all-time low of 40.1 last month. 

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This week’s reading indicates a divergence in consumer sentiment about their own finances versus the state of the overall economy. As Americans continue to grapple with a housing shortage, confidence in the housing market dropped 2.7 points to an all-time low of 27.4. Also driving this week’s decline in economic sentiment was falling confidence in personal finances, which fell 2.4 points to 53.1—likely a continued reflection of supply chain issues and inflation worries heading into the holiday season. On the other hand, confidence in the overall U.S. economy jumped to 38.1, a notable 3.9-point increase that may indicate rising optimism about the general economy—even if consumers aren’t feeling the same way about their own finances. Here’s how the other indicators moved:

– Confidence in making a major purchase dropped 0.8 points to 27.9

– Confidence in the job market dropped 0.2 points to 56.1

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The ESI’s three-day moving average began the period on November 10 at a steady 41.9 before falling and rising in two cycles. It hit its period high of 42.9 on November 16 and low of 38.6 three days later. The moving average closed out on an upswing, reaching 41.8 on November 23.

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The next release of the ESI will be Wednesday, December 8.

Economic Sentiment Recovers Slightly

Economic sentiment inched up over the past two weeks, on the heels of the passage of President Biden’s signature infrastructure deal in the House of Representatives. The HPS-CivicScience Economic Sentiment Index (ESI) rose 0.9 points to 41.0, only the second gain since early August. The ESI’s three-day moving average closed out on a four-day, 4.5-point jump following the passage of the infrastructure package.

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Driving this reading’s increase was a substantial recovery in confidence in making a major purchase, which rose 3.6 points to 28.7. The last two weeks saw the passage of the Infrastructure Investment and Jobs Act, clearing a logjam in President Biden’s agenda and releasing $550 billion in new federal investment. Yet optimism surrounding the recovery from COVID-19 continues to be tampered by supply chain and inflation concerns. On November 10, the day after this ESI period ended, the Labor Department reported that consumer prices skyrocketed in October, jumping 6.2% in the largest inflation surge in over 30 years. Here is how the ESI’s other indicators moved:

– Confidence in personal finances rose 1.2 points to 55.5

– Confidence in the housing market rose 0.3 points to 30.1

– Confidence in the overall U.S. economy dropped 0.4 points to 34.2

– Confidence in the job market dropped 0.2 points to 56.3

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The ESI’s three-day moving average began the period sluggishly, dropping from 39.6 on October 27 to its period low of 38.2 on October 28. The moving average recovered towards the middle of the period, then dropped again before closing out on a surge following the passage of the infrastructure bill, ending the period at its high of 42.9 on November 9.

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The next release of the ESI will be Tuesday, November 23.

Consumer Economic Sentiment Collapses To Historic Low

Overall consumer economic sentiment dropped 1.4 points to 40.1, according to the HPS-CivicScience Economic Sentiment Index (ESI), tying with March 2020 for the lowest recording in ESI history.

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Confidence in making a major purchase fell drastically, declining 6.2 points to an all-time low of 25.1, amid supply chain problems that have exacerbated price increases for larger items, including vehicles and televisions. Meanwhile, consumer prices rose 5.4% in September, global energy prices soared to their highest levels in years, and the Federal Reserve has indicated growing concerns about lasting inflation and supply chain issues. For the second ESI reading in a row, confidence in the overall U.S. economy reached a record low, falling 0.9 points to 34.6. Here’s how the other indicators moved:

– Confidence in finding a new job rose 0.6 points to 56.5

– Confidence in personal finances remained at 54.3

– Confidence in the housing market fell 0.9 points to 29.8

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The ESI’s three-day moving average began at 40.6 on October 13. It reached its high of 42.9 on October 18 before falling again, hitting its low of 38.8 on October 23. It closed at 39.2 on October 26.

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The next ESI release will be Wednesday, November 10.

With No End In Sight To COVID-19, Economic Sentiment Continues to Decline With Confidence In Overall U.S. Economy Reaching Historic Low

Overall consumer economic sentiment dropped 1.3 points to 41.5, according to the HPS-CivicScience Economic Sentiment Index (ESI), the second-lowest recording in ESI history behind March 2020 when the COVID-19 pandemic began. This week’s decline was driven by falling confidence in all five ESI indicators, including confidence in the overall U.S. economy, which hit its lowest reading ever. 

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All five of the ESI’s indicators fell over the past two weeks. Confidence in the overall U.S. economy dropped the most, falling 1.6 points to a historic low of 35.5 as consumers’ outlook on the next six months soured. Fatigue of the relentless pandemic, as well as consumer fears of rising energy prices, stagflation, and ongoing supply chain disruptions, are all weighing heavily on the economy. The ESI’s overall downward slump was also driven by declines in every other indicator:

– Confidence in finding a new job sank 1.5 points to 55.9

– Confidence in making a major purchase declined 1.3 points to 31.3

– Confidence in personal finances dropped 0.4 points to 54.3

– Confidence in the housing market fell 1.3 points to 30.7

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The ESI’s three-day moving average began the period at its high of 43.8 on September 29. It wavered over the next two weeks while declining overall, reaching its low of 40.2 on October 2 and closing at 42.9 on October 12.

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The next ESI release will be Wednesday, October 27.

A Speckle Of Relief For Economic Sentiment

Economic sentiment experienced its first positive movement since early August, as the HPS-CivicScience Economic Sentiment Index (ESI) eked out a 0.3 gain, after an uptick in the ESI’s three-day moving average since September 25. Leading the charge were jumps in confidence in the housing market and finding a new job.

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Four of the ESI’s five indicators rose over the past two weeks. Confidence in the housing market rebounded slightly from its longstanding slide, rising 1.4 points to 32.0. The housing market showed signs of slowing in recent weeks as home-price growth eased. In the broader economy, there are indications that recent inflation may persist longer than expected, and unemployment numbers continue to be mixed. The ongoing congressional debates over President Biden’s agenda, the federal budget, and raising the debt ceiling may also weigh more heavily on consumers’ minds in coming readings. Here’s how the ESI’s other indicators moved:

– Confidence in finding a new job rose 1.2 points to 57.4

– Confidence in making a major purchase rose 1.0 point to 32.6

– Confidence in the overall U.S. economy rose 0.4 points to 37.1

– Confidence in personal finances dropped 2.7 points to 54.7

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The ESI’s three-day moving average began the two-week stretch at 43.8 on September 15, peaking the next day at 45.4. The moving average then declined, bottoming out at 39.3 on September 25 before quickly recovering and closing at 44.0 on September 28.

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