Consumer Confidence In The Job And Housing Markets Continue To Diverge With Record-Setting Readings
Overall economic sentiment fell again over the last two weeks, according to the HPS-CivicScience Economic Sentiment Index (ESI), dropping 1.4 points to 48.7. While job market confidence increased another 1.5 points to 60.5, an all-time high for the third reading in a row, housing market confidence tumbled 2.6 points to 35.8, a record low for the second consecutive reading.
As COVID-19 restrictions dissipate, jobs are plentiful, but workers are not. Especially in lower-wage industries like hospitality, positions are widely available—but employers are struggling to fill them. On the other hand, intense demand and short supply are driving home prices to grow at the fastest pace in 15 years. These forces in the job and housing markets are tugging overall economic sentiment in polar opposite directions; the remaining three ESI indicators also display a mixed consumer confidence:
– Confidence in the U.S. economy dropped 2.6 points to 49.4.
– Consumer confidence in making a major purchase fell 3.6 points to 40.0, the lowest reading in 2021.
– Confidence in personal finances ticked up 0.2 points to 57.6.
The three-day moving average began on May 12 at 50.4 and declined for a week, hitting its low of 47.0 on May 19. It then rose to 51.0, its high this period, on May 24 and closed out at 49.9 on May 25.
The next release of the ESI will be Wednesday, June 9, 2021.