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 fell slightly over the last two weeks, according to the HPS-CivicScience Economic Sentiment Index (ESI). The index dropped by a total of 0.7 points, from a reading of 53.3 points on June 26th to 52.6 points on July 10th, and marks the third reading period in a row the ESI has reversed course. Since May 1st’s reading of 52.8, the ESI has remained basically unchanged, falling only by 0.2 points. Over the same time horizon, the ESI has not exceeded 53.4 or fallen below 52.9 points.
The slight decline in economic sentiment comes amid escalating trade tensions between the United States and China. During the reading period, two major decisions were made. First, President Trump announced an “enhanced” review process of Chinese investment in U.S. technology firms on June 27th. The U.S. announced on July 6th that they would initiate new duties of 25 percent, leading to Beijing immediately retaliated with its own tariffs.
Four of the ESI’s five indicators fell during the two-week reading period. Consumer confidence towards the housing market experienced the largest drop, falling by 1.9 points, from 49.5 to 47.6. The decline in confidence in the housing market was trailed closely by a decline in consumer confidence in the broader U.S. economy, which fell 1.4 points to reach a reading of 49.0. Additionally, there was a 0.6 point decline in consumer confidence in making a major purchase that was offset by a 0.7 point increase in personal finances.
Economic sentiment in the U.S. labor market remained relatively flat throughout, moving down 0.3 points to hit a reading of 48.3.