Economic Sentiment Recovers Slightly
Economic sentiment inched up over the past two weeks, on the heels of the passage of President Biden’s signature infrastructure deal in the House of Representatives. The HPS-CivicScience Economic Sentiment Index (ESI) rose 0.9 points to 41.0, only the second gain since early August. The ESI’s three-day moving average closed out on a four-day, 4.5-point jump following the passage of the infrastructure package.
Driving this reading’s increase was a substantial recovery in confidence in making a major purchase, which rose 3.6 points to 28.7. The last two weeks saw the passage of the Infrastructure Investment and Jobs Act, clearing a logjam in President Biden’s agenda and releasing $550 billion in new federal investment. Yet optimism surrounding the recovery from COVID-19 continues to be tampered by supply chain and inflation concerns. On November 10, the day after this ESI period ended, the Labor Department reported that consumer prices skyrocketed in October, jumping 6.2% in the largest inflation surge in over 30 years. Here is how the ESI’s other indicators moved:
– Confidence in personal finances rose 1.2 points to 55.5
– Confidence in the housing market rose 0.3 points to 30.1
– Confidence in the overall U.S. economy dropped 0.4 points to 34.2
– Confidence in the job market dropped 0.2 points to 56.3
The ESI’s three-day moving average began the period sluggishly, dropping from 39.6 on October 27 to its period low of 38.2 on October 28. The moving average recovered towards the middle of the period, then dropped again before closing out on a surge following the passage of the infrastructure bill, ending the period at its high of 42.9 on November 9.
The next release of the ESI will be Tuesday, November 23.