Consumer confidence dropped over two points this week to 51.0 points according to the HPS-CivicScience Economic Sentiment Index (ESI). This was the largest two-week period drop in one year and represents the lowest level for the ESI in over a year.
All five of the ESI’s indicators fell during the reading period. The largest decline was driven by decreased confidence in the broader economy, which fell by 3.5 points. Consumer confidence in making a major purchase also fell significantly, dropping 2.9 points to a reading of 50.9. Confidence in personal finances for consumers also fell 2.4 points to hit a reading of 65.2 during the reading period. Economic sentiment towards the housing and labor market both fell by 1.0 and 0.9 points respectively.
The reversal in overall consumer confidence comes amid greater economic uncertainty and decreasing global growth. The drop in consumer confidence occurs as volatile geopolitical tensions with China persist, synchronized global economic growth remains uncertain, and U.S. home data continues to weaken. Additionally, investors continue to express uncertainty around the Federal Reserve’s plans to continue raising interest rates.