After a slight recovery, the HPS-CivicScience Economic Sentiment Index (ESI) dropped 1.8 points to a reading of 48.1. This is the ESI’s lowest level since November 15, 2016.
Of note, the University of Michigan’s January consumer confidence survey exhibited the same sharp drop to lows not seen since the 2016 election, a drop that was picked up by the ESI during its December reading. The University of Michigan index fell from 98.3 to 90.7 in January, dropping to its lowest level since October 2016.
The ESI’s drop in December coincided with steep declines in the stock market, which has improved in January. The smaller drop in consumer confidence this month occurs during a prolonged government shutdown in the United States, which has triggered declines in the past. Additionally, global fears of an economic slowdown, the failure in the United Kingdom to pass a final “Brexit” resolution, and continuing uncertainty about the future of trade policy continue to grab headlines.
Confidence fell across four of the five components of the ESI. Confidence in making a major purchase experienced the largest decline, falling by 4.0 points, to a year-over-year low of 44.5. Economic sentiment toward the broader U.S. economy also fell precipitously, dropping by 3.3 points to 42.4. Consumer confidence in their own financial situation also dropped, falling 1.6 points to a reading of 63.8. The only indicator to rise was confidence in the broader housing market which rose by 0.4 points, while labor market confidence fell slightly by 0.2 points.
Each of these three components is now between three and eight points below their 2018 averages.
The three-day moving average fell steadily in the second half of January. During the past two weeks, it fell from a high of 51.3 points on January 9 to a low of only 46.9 points on January 12, before climbing slightly off two-week lows to end with a reading of 47.3.
The next release of the ESI will be on Tuesday, February 5, 2019.
About the Index
The HPS-CivicScience Economic Sentiment Index (“ESI”) is a “living” index that measures U.S. adults’ expectations for the economy going forward, as well as their feelings about current conditions for major purchases. The primary goal of the Index is to accurately measure movements in overall national economic sentiment, and to provide a more sophisticated alternative to existing economic sentiment indices. Unlike other prominent indices that release consumer sentiment estimates infrequently, the HPS-CivicScience Index is updated in real time as responses are collected continuously every hour, every day. Large-scale cross-tabulation of survey responses and consumer attributes enable more granular analyses than are currently possible through prevailing measures.
For a more detailed overview of the Index and the underlying methodology, please request a white paper.
About Hamilton Place Strategies (HPS)
Hamilton Place Strategies (HPS) is an analytical public affairs consulting firm with offices in Washington, D.C. and San Francisco. We integrate substantive analysis with communications and believe a deep understanding of business and economics leads to more effective public engagement and better outcomes for our clients.
CivicScience, Inc. provides the leading intelligent polling and real-time consumer insights platform, the InsightStore™. Its proprietary platform powers the world’s opinions and quickly gets that data to the decision makers who care. Every day, CivicScience polls ask millions of people questions related to thousands of topics, while its powerful data science and big data technology analyzes current consumer opinions, discovers trends as they start, and accurately predicts future behaviors and market outcomes. CivicScience polls run on hundreds of premier websites, in addition to its own public polling site at www.civicscience.com. CivicScience’s InsightStore™ is used by leading enterprises in marketing research, advertising, media, financial services, and political polling. For more information, visit CivicScience by clicking here and follow them on Twitter – @CivicScience.