Despite Record-Breaking Confidence In Job Market, Consumers Are Reluctant To Spend
Economic sentiment fell for the fourth straight reading over the last two weeks, as the HPS-CivicScience Economic Sentiment Index (ESI) dropped 1.6 points to 46.3. A new record high for confidence in the job market was not enough to outweigh steep declines in confidence in making a major purchase and confidence in the housing market, with the latter reaching a new record low.
This reading reflects a continued divergence between confidence in the job market on the one hand and confidence in the housing market on the other. Confidence in the job market rose 2.8 points to 61.5 (the 10th increase over the past 11 readings), while confidence in finding a new home dropped 3.4 points to 29.1 (the seventh straight decline). Consumers find themselves in an economy featuring record-high numbers of open jobs but also historically expensive homes and rising inflation fears. The ESI’s other three indicators also declined:
– Confidence in making a major purchase dropped 4.4 points to 34.9, the lowest point since April 2020.
– Confidence in the overall U.S. economy declined 2.3 points to 49.7.
– Confidence in personal finances dipped 0.5 points to 56.3.
The three-day moving average began on May 26 at 47.1, rising to its peak of 48.3 on June 13. It reached its two-week low of 43.5 on June 16, before closing the period at 46.2 on June 22.
The next release of the ESI will be Wednesday, July 7, 2021.