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:
Economic sentiment held flat over the past two weeks, maintaining a reading of 47.7, according to the HPS-Civic Science Economic Sentiment Index (ESI). Despite bumps in confidence in the job market and U.S. economy, the reading was weighed down by a significant decline in Americans’ confidence in their personal finances.
Three of the ESI’s five indicators increased over the past two weeks. Climbing the most was confidence in the job market which rose 1.3 points to 41.0, returning to a level similar to that recorded before the most recent COVID surge. Confidence in the U.S. economy and making a major purchase also experienced slight upticks, increasing 0.8 and 0.5 points, to 50.9 and 42.5 respectively. Falling the most was confidence in personal finances, which dropped 1.9 points to 53.9. Despite the continued distribution of economic impact payments throughout January, confidence in personal finances has now fallen 3.4 points since the start of January. Confidence in the housing market also fell, declining 1.0 point to 50.2.
This is the first full ESI reading under the new Biden Administration, which has prioritized COVID-related policies such as increased vaccination distribution and advocating for another round of economic stimulus. The size and scope of the stimulus is still unclear as Republican Senators who met with President Biden on Monday have offered a smaller, trimmed down stimulus that could pass on a bipartisan basis, while Democratic leadership continues to support advancing a significantly more robust, likely partisan, stimulus package. Despite a litany of economic data showing that growth, and employment slowed in the Q4 of 2020, the Congressional Budget Office released some positive projections that U.S. growth will return to pre-pandemic levels later this year and employment may fall to 5.3 percent.