Economic Sentiment Continues Its 2021 Rut
Overall economic sentiment fell during the first two weeks of February 2021, declining 0.3 points to a reading of 47.4, according to the HPS-CivicScience Economic Sentiment Index (ESI). As Congressional debates over additional stimulus continue, wariness about the overall U.S. economy outweighed Americans’ boost in confidence in their personal finances and the job market.
Three of the ESI’s five indicators declined over the past two weeks. Despite the Biden administration’s announcement of securing an additional 200 million doses of the COVID-19 vaccine, confidence in the U.S. economy fell the most, declining 1.1 points to 49.8, the lowest reading in 2021 and the first dip below 50 points since December 2020.
– Two other indicators declined: Confidence in making a major purchase dropped by 0.3 points to 42.2.
– Housing market confidence fell more significantly, dropping 0.9 points to 49.3.
Meanwhile, 49,000 jobs were gained in January, and Congress continues to debate the size and form of additional stimulus, which may partly explain why the final two indicators increased:
– Job market confidence saw a slight uptick of 0.2 points to 41.2 points, the highest reading since October 2020.
– Confidence in personal finance increased by 0.6 points to 54.5.
The moving average began on February 3 at 48.0 and peaked on February 12 at 48.9 before a steady decline over the past few days, reaching its low and closing number of 45.4 on February 16.
The next release of the ESI will be Wednesday, March 3, 2021.