Consumer sentiment continued to inch upward over the past two weeks, with the HPS-CivicScience Economic Sentiment Index (ESI) increasing 0.5 points to 41.5, its highest position in two months.
The increase in economic sentiment is due to robust gains in confidence in the job market and the overall U.S. economy. In the middle of the ESI’s reporting period, the Federal Reserve announced its intention to raise short-term bond rates three times next year to counteract inflation. Chairman Powell acknowledged that while the labor market hasn’t yet recovered to full employment, the job market continues to run hot. The ESI measured that over the past two weeks, consumer confidence in the job market increased 2.5 points to 56.8—the highest level in three months, and confidence in the overall U.S. economy shot up similarly, rising 2.4 points to a four-month high of 38.6. The other three ESI indicators fell slightly:
– Confidence in making a major purchase fell 0.8 points to 28.7
– Confidence in personal finances fell 0.3 points to 55.1
– Confidence in the housing market fell 1.2 points to 28.4