With No End In Sight To COVID-19, Economic Sentiment Continues to Decline With Confidence In Overall U.S. Economy Reaching Historic Low
Overall consumer economic sentiment dropped 1.3 points to 41.5, according to the HPS-CivicScience Economic Sentiment Index (ESI), the second-lowest recording in ESI history behind March 2020 when the COVID-19 pandemic began. This week’s decline was driven by falling confidence in all five ESI indicators, including confidence in the overall U.S. economy, which hit its lowest reading ever.
All five of the ESI’s indicators fell over the past two weeks. Confidence in the overall U.S. economy dropped the most, falling 1.6 points to a historic low of 35.5 as consumers’ outlook on the next six months soured. Fatigue of the relentless pandemic, as well as consumer fears of rising energy prices, stagflation, and ongoing supply chain disruptions, are all weighing heavily on the economy. The ESI’s overall downward slump was also driven by declines in every other indicator:
– Confidence in finding a new job sank 1.5 points to 55.9
– Confidence in making a major purchase declined 1.3 points to 31.3
– Confidence in personal finances dropped 0.4 points to 54.3
– Confidence in the housing market fell 1.3 points to 30.7
The ESI’s three-day moving average began the period at its high of 43.8 on September 29. It wavered over the next two weeks while declining overall, reaching its low of 40.2 on October 2 and closing at 42.9 on October 12.
The next ESI release will be Wednesday, October 27.