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.