Consumer Confidence Remains Subdued – No Matter The Weather
Following a slight rebound after six weeks of decline, consumer confidence stabilized over the past two weeks, according to the latest HPS-CivicScience Economic Sentiment Index (ESI) reading. At 45.3, consumer confidence remained below its December 2013 readings. Moreover, regional and state-based analyses suggest the weather’s impact on local economies has not been the driving force behind recent declines, raising concerns that the dip in consumer confidence during January and February may reflect underlying economic weaknesses.
The two-week average of the ESI rose 0.1 points to 45.3, which is slightly above the average reading over the past 12 months, but still one full point away from its December 2013 reading and four points off the 2013 high.
The extreme weather on the east coast has been blamed for slowing growth and employment gains in January and February of this year. Notably, ESI data shows that consumer confidence trends in weather-affected areas – namely the Northeast – did not deviate from other regions, falling in January and rebounding over the past month. Further, while subject to some data limitations, additional analysis of more narrow groups of states found no evidence that consumer confidence was impacted by the weather.
The data suggest that the impact of the weather may be temporary, as it did not hit consumers’ outlook on their personal financial situation or their confidence in making major purchases. However, it also suggests the fall in consumer confidence in the early part of this year should not be discounted as merely the result of a harsh winter slowing growth in certain regions.
The three-day rolling average remained highly volatile over the two-week period, but finished the two-week period at 46.4.
Looking across each component of the index, confidence in personal finances was the only group to experience a significant slide. Meanwhile, the only component that saw an increase was labor market confidence, which slightly rebounded from a dip in its previous two-week average.
Below are all five questions included in the index:
- Over the next six months, do you expect your personal financial situation to get better, stay the same, or get worse?
- Given the current state of your local market, is now a good or bad time to purchase a new home?
- Given the current state of the economy, is now a good time or a bad time to make a major purchase like a new car or home improvements?
- Looking ahead six months, do you think the U.S. economy will get better, stay the same, or get worse?
- Over the next six months, do you think it will become easier or more difficult to find a new job?
The next release of the ESI will be Tuesday, March 25th.
About the Index
The HPS-CivicScience Economic Sentiment Index (“ESI”) 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.
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.
CivicScience is a next-generation polling and data mining company. The company partners with hundreds of premier websites to survey millions of people every week. Proprietary technology then rapidly analyzes consumer opinion, discovers trends in real-time, and accurately predicts market outcomes. CivicScience is used by leading enterprises in an array of industries including marketing research, advertising, digital media, financial services, and political polling.