Economic Sentiment Rebounds After Two-Month Slide
Economic sentiment rebounded over the last two weeks, ending a slide that lasted from the end of April to the end of June. The HPS-CivicScience Economic Sentiment Index (ESI) jumped 1.5 points on the back of strong gains in confidence in making a major purchase and confidence in the housing market—the same indicators that had been driving the recent drop in economic sentiment.
This reading represents a slight reversal of a months-long divergence between confidence in the job market on the one hand and confidence in the housing market and making a major purchase on the other. Confidence in the housing market rose 3.8 points (to 32.9; representing this indicator’s first positive move since March) while confidence in making a major purchase rose 4.3 points (to 39.2; the first positive move since April). The changes come as multiple states increased their minimum wage on July 1, and employees are benefitting from the fastest wage growth since the 1980s.
– Confidence in personal finances rose 3.8 points to 60.1, the highest level in over a year.
– Confidence in the job market dropped 3.1 points to 58.4 but remains near all-time highs.
– Confidence in the overall U.S. economy dropped 1.3 points to 48.4.
The three-day moving average began on June 23 at 45.9, slowly dropping to its two-week low of 44.5 on June 28. The moving average then rose rapidly, peaking at 52.2 on July 3 before closing out the period at 45.8 on July 6.
The next release of the ESI will be Wednesday, July 21, 2021.