Economic Sentiment Hits All-Time Low Ahead Of Biden’s State Of The Union

Economic sentiment fell sharply over the past two weeks, to the lowest reading since the HPS-CivicScience Economic Sentiment Index (ESI) began measuring the public’s opinion of the economy in 2013. The ESI decreased 2.4 points to 38.1.

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All five of the ESI’s indicators dropped over the past two weeks, with two indicators hitting their all-time lows:

— Confidence in making a major purchase fell by 2.6 points to 23.8

— Confidence in buying a new home fell by 1.9 points to 25.2

The greatest decrease was in confidence in the overall U.S. economy, which fell 4.7 points to 34.3, just 0.1 points from that indicator’s all-time low. Confidence in finding a new job fell by 2 points to 52.1, and confidence in personal finances fell by 0.6 points to 55.2.  
Headlines have been dominated by the Russian invasion of Ukraine over the past two weeks, as governments impose new sanctions and private companies move to divest from Russian investments and products. President Biden’s average approval rating also hit a low of 40.4% on February 27, just two days ahead of his first State of the Union address. In his speech, Biden singled out inflation, which is at its highest rate in a decade, as his administration’s top priority ahead of the midterm elections this fall.

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The ESI’s three-day moving average began this two-week stretch at 39.6 on February 16. It hit a low of 35.6 on February 26 amidst coverage of Russia’s invasion of Ukraine, and recovered almost entirely to 39.4 by the end of the period on March 1.

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The next release of the ESI will be Wednesday, March 16, 2022.