Consumer confidence has reached its highest level in at least five years, as the HPS-CivicScience Economic Sentiment Index (ESI) broke its all-time high today by surpassing all previous readings since it came into existence in 2013. The index rose 1.2 points to 54.3 over the past two weeks, building on the gains experienced at the end of 2017. Today’s record breaking reading surpassed the ESI’s previous all-time high of 53.3, achieved on January 13, 2015, by a full point. The unprecedented level of consumer confidence comes as American businesses and consumers prepare to operate under a new tax code for the first time in more than 30 years thanks to the passage of the Tax Cuts and Jobs Act.
Confidence in three of the index’s five indicators increased, as consumers felt more confident in the labor market, in their personal finances, and in making a major purchase. Economic sentiment toward the labor market was the driving force behind the overall index’s rise during the reading, as confidence increased 4.8 points–from 44.8 to 49.6. Consumer confidence in personal finances rose 2.5 points to 68.0, while confidence in making a major purchase increased 1.3 points to 54.2.
Consumers were less confident in the broader U.S. economy and the housing market. Confidence in the broader U.S. economy declined by 1.5 points, falling to 51.4, while confidence in the housing market dropped 1.2 points to 48.4.
In continuing the trend of firsts in the ESI’s history in this reading, consumers are now more confident in the labor market than they are in the housing market. In fact, this reading serves as the first time the labor market indicator has not been the indicator in which consumers are least confident since March 22, 2016, when sentiment toward the broader U.S. economy dipped beneath labor market sentiment.
The index’s three-day moving average ended the two-week reading period on a high note, improving 5.7 points to reach its peak of 57.3 on Tuesday, January 9, the final day of the reading. The moving average started the reading period at 51.6, its lowest point during the two-week period.
The next release of the ESI will be January 23, 2018.
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.