Finance

Consumer Confidence Recovers To Start 2019

Image Credit: Photo by Mitul Shah from Burst

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: 

Consumer confidence recovered a bit during the beginning of 2019, according to the HPS-CivicScience Economic Sentiment Index (ESI). The ESI rose 1.3 points, offsetting some of the 4.6 point drop in December that brought the index to a two-year low.

Four out of five of the ESI’s indicators increased during the reading period. The largest increase was driven by greater confidence in the broader economy, which rose by 2.6 points. The jump in confidence about the U.S. economy was closely tracked by an increase of 2.1 points in confidence in making a major purchase. Additionally, economic sentiment toward the labor market increased by 1.9 points. Confidence in personal finances for consumers also rose slightly by 0.7 points to 65.4, while confidence in the broader housing market dropped by 0.7 points to 45.7 points.

The December decline in consumer confidence coincided with steep declines in the stock market, a trend that stalled during this two-week period. Last week, the Bureau of Labor Statistics reported 315,000 new jobs in December and an increase in wages, far exceeding expectations. However, trade negotiations with China still loom and the government shutdown appears to have no immediate end date.

The three-day rolling average rose during the observation period, ending at a reading of 50.5, 3.0 points off its low of 47.5 points on December 26.

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