Consumer Confidence Sees Largest Decline Since The Government Shutdown
The decline in consumer confidence quickened over the past two weeks as the HPS-CivicScience Economic Sentiment Index (ESI) fell from 45.5 to 44.2. This is the largest decline since the government shutdown and the sixth largest over the past year. Coming on the heels of back-to-back disappointing jobs reports, this reading marks the third consecutive decline in the two-week average, bringing the ESI a full two points below its six-month high set in December.
During the two-week period, the three-day rolling average peaked at 46.3 after hitting 41.2, the lowest three-day rolling average in the past three months.
Moreover, while economic confidence among the employed remained elevated in January, it fell 2.6 points in the past two weeks. Meanwhile, with a 0.6 point drop to 33.9, economic confidence among the unemployed continued its downward trend following the expiration of unemployment benefits for 1.3 million people at the end of December. In total, the ESI’s two-week average for the unemployed has fallen six full points since December 31st.
Looking across each component of the index, only labor market confidence held up over the two-week period. The largest drop came in respondents’ views on making a major purchase given current economic conditions.
All five questions in the index are below:
- 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, February 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.