Economic Sentiment Hits Record Low For Third Consecutive Reading
Economic sentiment declined to a record low for the third consecutive reading, amidst persistent inflation concerns and the continuation of Russia’s war against Ukraine. The HPS-CivicScience Economic Sentiment Index (ESI) dropped 0.5 points to 35.8.
Three of the ESI’s five indicators reached new all-time lows this week:
— Confidence in personal finances fell 1.6 points to an all time low of 50.7.
— Confidence in purchasing a new home fell 1.6 points to an all time low of 23.0.
— Confidence in making a major purchase fell 0.4 points to an all time low of 20.9.
Additionally, confidence in getting a new job fell 1.8 points to 49.8. The only indicator to rise this week was confidence in the overall U.S. economy, which rose 3.1 points to 34.7.
Inflation and Russia’s invasion of Ukraine continue to drive the news cycle. Americans are more worried about inflation than at any point since 1985, with 17% of respondents in a recent poll calling inflation the “nation’s most important problem.” The consequences of the situation in Ukraine, meanwhile, are becoming apparent across the economy, from spiking fertilizer costs to the cost of fuel. Gas prices in the U.S. remained above $4.20 per gallon for the past three weeks, leading to discussions within the Biden administration and Congress of the potential for direct cash relief in the form of gas rebates.
The ESI’s three-day moving average began this two-week stretch at 37.1 on March 16. It hit its two-week low of 34.4 on March 20, and closed the session at 36.2 on March 29.
The next release of the ESI will be Wednesday, April 13, 2022.