The HPS-CivicScience Economic Sentiment Index (“ESI”) is a “living” index that measures U.S. adults’ expectations for the economy going forward, as well as their feelings about current conditions for major purchases. The primary goal of the Index is to accurately measure movements in overall national economic sentiment and to provide a more sophisticated alternative to existing economic sentiment indices. Unlike other prominent indices that release consumer sentiment estimates infrequently, the HPS-CivicScience Index is updated in real-time as responses are collected continuously every hour, every day. Large-scale cross-tabulation of survey responses and consumer attributes enable more granular analyses than are currently possible through prevailing measures.
Excerpt From the Latest Reading:
As the spread of COVID-19 (coronavirus) brings countries and the global economy to a standstill, consumer confidence continued its drastic decline, slipping to its lowest point in over a year. The HPS-CivicScience Economic Sentiment Index (ESI) followed last reading’s fall of 1.9 points with a 2.4 point drop to land at 49.4, its lowest reading since January 2019.
As countries face disruptions to global supply chains and consumer demand shifts to reflect social distancing measures and closed businesses, consumer sentiment towards the labor market, personal finances, and making a major purchase have all plummeted. On the other hand, sentiment toward the broader US economy has improved, and confidence in the housing market remains strong.
Three of the ESI’s indicators fell over the past two weeks. Consumer confidence in the labor market fell the most, plummeting by 5.3 points to 38.1, its lowest reading since 2015. Sentiment toward personal finances and making a major purchase decreased by 5.2 and 4.8 points, respectively. Meanwhile, consumer confidence in the broader U.S. economy improved by 2.3 points to 47.0, and sentiment toward the housing market increased by 1.1 points to 54.4.
The stark decline continues the overall downward trend since the start of the year, and comes amid the rapidly evolving COVID-19 crisis. As countries around the world move to contain the pandemic, the U.S. has seen stock markets plummet and the Federal Reserve cut interest rates to zero and promise to buy at least $700 billion in government and mortgage-related bonds. Meanwhile, state governments are taking action to slow the spread of the virus and encourage social distancing, resulting in slowed economic activity both in the U.S. and abroad.
Check out the full reading.