Economic Sentiment Declines Following Year-Long High
Economic sentiment fell 1.1 points to 50.3, according to the HPS-CivicScience Economic Sentiment Index (ESI). The decline comes on the heels of a month-long surge in confidence that peaked on March 16 with the highest reading since the pandemic declaration. The decline was driven by significant drops in confidence toward the U.S. economy and the housing market.
Three of the ESI indicators declined over the past two weeks despite increasing rates of vaccinations, implementation of the American Rescue Plan, and extension of the Paycheck Protection Program. As COVID-19 cases began to tick upwards over the past two weeks, confidence in the U.S. economy experienced a sharp decline, falling 2.8 points to 53.8. Meanwhile, ahead of what many experts expect to be a strong March jobs report, confidence in the job market continued to spike, rising 1.9 points to 47.5. This is the reading’s highest level since 2019, and a divergence from the other economic indicators.
The other indicators experienced the following movement:
– Confidence in the housing market declined sharply, falling 3.1 points to 47.0, its lowest level since April 2020.
– Confidence in personal finances fell 1.7 points to 58.3, retreating from its record-high reading.
– Consumer confidence in making a major purchase rose 0.5 points to 45.1, a new high for 2021.
The moving average began on March 17 at its peak of 53.6. It steadily fell to its low of 48.8 on March 24 before entering a period of fluctuation, closing the reading at 50.1 on March 30.
The next release of the ESI will be Wednesday, April 14, 2021.