Consumer Confidence Dips, But Falling Oil Prices Expected To Boost Confidence
Consumer confidence dropped nearly two points, from 49.2 to 47.5, following a surge in the HPS-CivicScience Economic Sentiment Index (ESI) two weeks ago. Notably, the price of oil dropped below $70 a barrel at the start of the week in the wake of OPEC’s announcement that it will maintain current production levels. The sudden drop in prices follows nearly five months of declines. According to Goldman Sachs research, the drop in gas prices over the past six months is equal to a $75 billion tax cut.
Data from CivicScience lends support to the view that falling oil prices are boosting consumer confidence. Specifically, confidence has risen more than six points since October among those who are very concerned about gas prices. Conversely, confidence among those not concerned about gas prices at all has actually dipped during that time period. Meanwhile, confidence increased more than four points since October among those who are somewhat concerned about gas prices.
Further evidence is seen when cross-tabulating the ESI by commute times. While all groups have seen increases in confidence since July, when oil prices began to fall, those with longer commute times have seen the largest increase. Among those with a two-plus hour commute, consumer confidence increased nearly eight points. Meanwhile, those with less than a one hour commute saw only a three-point increase. This last data point is subject to confounding factors, but overall data from the ESI suggests falling oil prices should boost confidence in the coming months.
Looking just at the past two weeks, all of the components of the ESI fell, except for a half-point increase in confidence in personal finances. The most dramatic drops were in confidence in the U.S. economy (down 3.6 points after surging 4.4 points two weeks ago) and in the job market (down 3.6 points to 36.8). Of note, even with this drop, consumer confidence is still higher than it was this time last year and well above the 2014 average.
The next release of the ESI will be December 16.
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 is a policy, advocacy, and communications consulting firm with a focus and expertise at the intersection of government, business, and media.
For more information, visit Hamilton Place Strategies by clicking here and follow them on Twitter – @HPSInsight.
About CivicScience
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.