Economic Sentiment Nears Historic Low Set At Start Of Pandemic
Economic sentiment continued its decline over the past two weeks, with consumers expressing a particular lack of confidence in the overall U.S. economy. The HPS-CivicScience Economic Sentiment Index (ESI) dropped 0.4 points to 42.5, nudging closer to the all-time low of 40.1 reached in March 2020 when the COVID-19 pandemic hit the United States.
Of the ESI’s five indicators, confidence in the overall U.S. economy fell the most over the past two weeks, dropping 2.5 points to 38.0—down 18.6 points from the 2021 high reached in March. The drop comes as the Delta variant continues to make its presence felt nationally and globally. Restaurant dining, office occupancy, and airline travel all saw declines in recent weeks compared to earlier this summer. Concerns about inflation, meanwhile, show no signs of letting up: The PCE Index was up 4.2% in the 12 months ended July 2021, the highest rate since 1991. The ESI’s other indicators made the following moves:
– Confidence in personal finances dropped 1.7 points to 55.3
– Confidence in making a major purchase dropped 0.8 points to 31.7
– Confidence in the housing market rose 2.1 points to 30.4 but remains near all-time lows
– Confidence in finding a new job rose 0.5 points to 57.0
The ESI’s three-day moving average began the two-week stretch on August 18 at 42.4. It remained fairly stable before reaching its two-week low of 41.3 on August 24. Then it recovered and closed out the week at its high of 43.6 on August 31.
The next release of the ESI will be Wednesday, September 15, 2021.