Economic Sentiment Rebounds, Its First Jump Since January

Economic sentiment surged over the past two weeks, rising 2.2 points to a reading of 49.6, according to the HPS-Civic Science Economic Sentiment Index (ESI).  With Congress seemingly on the cusp of sending a COVID-relief bill to President Biden’s desk and COVID cases decreasing across the country, economic sentiment rose for the first time in two months. The surge was driven by a significant boost in confidence towards the overall U.S. economy.

All five of the ESI’s indicators rose over the past two weeks amidst better than expected economic data, House passage of the COVID-relief package, continued rollout of COVID vaccines, and new economic forecasts signaling strong U.S. economic growth in the months ahead. Confidence in the U.S. economy grew the most, rising by 5.6 points to 55.4, its largest jump since September.

The four other indicators rose at a more modest pace:

– Confidence in the job market increased 1.9 points to 43.1, its highest level since September.

– The consumer indicators of confidence in personal finances and making a major purchase rose 1.9 and 1.8 points, respectively.

– Confidence in the housing market increased slightly, moving up 0.1 point to 49.4.

The moving average began at its low of 47.6 on February 17 and peaked on February 21 at 50.7. It then fluctuated within a 1.0 band for the remainder of the reading, closing at 49.1 on March 2.

The next release of the ESI will be Wednesday, March 17, 2021.

Economic Sentiment Continues Its 2021 Rut

Overall economic sentiment fell during the first two weeks of February 2021, declining 0.3 points to a reading of 47.4, according to the HPS-CivicScience Economic Sentiment Index (ESI). As Congressional debates over additional stimulus continue, wariness about the overall U.S. economy outweighed Americans’ boost in confidence in their personal finances and the job market.

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Three of the ESI’s five indicators declined over the past two weeks. Despite the Biden administration’s announcement of securing an additional 200 million doses of the COVID-19 vaccine, confidence in the U.S. economy fell the most, declining 1.1 points to 49.8, the lowest reading in 2021 and the first dip below 50 points since December 2020.

– Two other indicators declined: Confidence in making a major purchase dropped by 0.3 points to 42.2.

– Housing market confidence fell more significantly, dropping 0.9 points to 49.3.

Meanwhile, 49,000 jobs were gained in January, and Congress continues to debate the size and form of additional stimulus, which may partly explain why the final two indicators increased:

– Job market confidence saw a slight uptick of 0.2 points to 41.2 points, the highest reading since October 2020.

– Confidence in personal finance increased by 0.6 points to 54.5.

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The moving average began on February 3 at 48.0 and peaked on February 12 at 48.9 before a steady decline over the past few days, reaching its low and closing number of 45.4 on February 16.

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The next release of the ESI will be Wednesday, March 3, 2021.

Economic Sentiment Plateaus In The First Full Reading Of The Biden Administration

Economic sentiment held flat over the past two weeks, maintaining a reading of 47.7, according to the HPS-Civic Science Economic Sentiment Index (ESI). Despite bumps in confidence in the job market and U.S. economy, the reading was weighed down by a significant decline in Americans’ confidence in their personal finances.

Three of the ESI’s five indicators increased over the past two weeks. Climbing the most was confidence in the job market which rose 1.3 points to 41.0, returning to a level similar to that recorded before the most recent COVID surge. Confidence in the U.S. economy and making a major purchase also experienced slight upticks, increasing 0.8 and 0.5 points, to 50.9 and 42.5 respectively. Falling the most was confidence in personal finances, which dropped 1.9 points to 53.9. Despite the continued distribution of economic impact payments throughout January, confidence in personal finances has now fallen 3.4 points since the start of January. Confidence in the housing market also fell, declining 1.0 point to 50.2.

This is the first full ESI reading under the new Biden Administration, which has prioritized COVID-related policies such as increased vaccination distribution and advocating for another round of economic stimulus. The size and scope of the stimulus is still unclear as Republican Senators who met with President Biden on Monday have offered a smaller, trimmed down stimulus that could pass on a bipartisan basis, while Democratic leadership continues to support advancing a significantly more robust, likely partisan, stimulus package. Despite a litany of economic data showing that growth, and employment slowed in the Q4 of 2020, the Congressional Budget Office released some positive projections that U.S. growth will return to pre-pandemic levels later this year and employment may fall to 5.3 percent.

Despite the ESI’s level reading, the three-day moving average ticked upwards in the closing days of the period. The moving average began on January 20 at 49.8 and peaked the following day at 50.4 It then maintained a relatively steady decline to its low of 44.8 on January 30. The average closed the reading on an upswing, closing at 48.3 on February 2.

The next release of the ESI will be Wednesday, February 17, 2021.

Economic Sentiment Falls Slightly Following Turbulent Two Weeks

Overall economic sentiment is down slightly in the second 2021 reading of the HPS-Civic Science Economic Sentiment Index (ESI). Following a two-week stretch in which the storming of the U.S. Capitol and delayed vaccine rollouts dominated the headlines, the ESI dropped 0.6 points to 47.7.

Four of the ESI’s five indicators declined over the past two weeks. Falling the most was confidence in personal finances, which dropped 1.5 points to 55.8. Close behind were readings of confidence in finding a new job (down 1.4 points to 39.7) and confidence in making a major purchase (down 1.3 points to 42.0). Bucking the downward trend of the other indicators was confidence in the housing market, which jumped up 2.2 points to 51.2.

The beginning of this two-week stretch was marked by both the U.S. Capitol being breached by rioters seeking to overturn the result of the 2020 election, and news that two Democrats–Jon Ossoff and Rev. Raphael Warnock–were the winners in Georgia’s Senate elections, tipping the makeup of the new Senate in the Democrats’ favor. At the same time, the number of applications for jobless benefits reached a level not seen since March in the week that ended Jan 9. The period also saw the continued acceleration of deaths due to COVID-19, while efforts to roll out the coronavirus vaccine were bogged down by confusion and delays across the country. Some form of forward-looking clarity, however, may have been achieved when President Joe Biden unveiled his plan to vaccinate 100 million Americans in his first 100 days in office.

Although the ESI fell over the course of the last two weeks, the three-day moving average notched a substantial upswing in the closing days of the period. The moving average began on January 6 at 47.2, before dropping to its low of 46.4 on January 12. The average then gradually increased, peaking at 49.9 on January 18, and closed out at 49.2 on January 19.

The next release of the ESI will be Wednesday, February 2, 2021.

Economic Sentiment Posts An Optimistic Start To 2021

As Americans say goodbye to the difficult year that was 2020 and ring in the New Year, consumers are expressing heightened confidence in 2021’s first reading of the HPS-CivicScience Economic Sentiment Index (ESI). Economic sentiment continued its month-long upward trend, posting an increase (1.4 points to 48.3) for the third straight reading following the enactment of a second COVID-19 relief bill and continued deployment of a COVID vaccine.

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Four of the five individual indicators rose during the two-week reading period. The largest increase was in confidence in the job market, which rose 2.7 points to 41.1. Confidence in the labor market has now risen 6.3 points over the past month, despite November’s stagnant jobs report and persistently high weekly unemployment claims. The consumer-centric indicators also received steady bumps, as confidence in making a major purchase and personal finances rose 2.5 and 1.7 points, respectively. Confidence in the overall U.S. economy followed last reading’s substantial increase with a muted, 0.4-point jump, entering 2021 at 50.7. 2020’s hottest indicator, the housing market, was the sole indicator to decline, falling by 0.3 points to 49.0.

The reading’s increase moves the ESI to confidence levels not seen since October and follows on the heels of the enactment of a $900B COVID-19 relief bill. The U.S. continued its vaccine rollout over the holidays, but two issues may impact future readings. Vaccine deployment delays across the country have stoked concerns about a slower pace of vaccination that could prolong the impact of the pandemic. Those concerns were exacerbated by the news that December was the deadliest month of the pandemic, as over 77,000 people lost their lives in the U.S. and experts remain worried that January may also be difficult following a holiday surge and the potential spread of a more contagious COVID-19 variant.

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The ESI’s three-day moving average fluctuated heavily over the past two weeks, beginning at 48.0 before dropping to its reading low of 46.4 on December 26. The moving average then steadily increased, peaking at 51.7 on January 2 before falling significantly to close the reading at 46.9.

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The next release of the ESI will be on Wednesday, January 20, 2021.