Economic sentiment continues to rise into Election Day

Economic sentiment increased to its highest level in over a year, driven by an over five-point jump in confidence in the U.S. economy. The latest biweekly reading of the Penta-CivicScience Economic Sentiment Index (ESI) increased by 1.1 points to 41.4.

Three of the ESI’s five indicators increased during this period. Confidence in the overall U.S. economy increased the most, rising 5.5 points to 56.7. This marks this indicator's largest increase since July.

—Confidence in finding a new job increased 0.6 points to 42.3. 

—Confidence in buying a new home increased 0.2 points to 22.8.

—Confidence in personal finances decreased 0.1 points to 59.1.

—Confidence in making a major purchase decreased 0.4 points to 26.1.

The U.S. Commerce Department released its advanced estimate of GDP, stating that real GDP increased 2.8 percent in the third quarter of 2024. This represents a slight deceleration from the second quarter of 2024, where real GDP increased 3%. Personal consumption expenditures, a proxy for consumer spending, rose by 3.7% for the quarter—adding 2.46 percentage points to the overall GDP.

Meanwhile, the Bureau of Labor Statistics released the October Jobs Report which showed that the economy added only 12,000 jobs in the month, representing the weakest job growth since December 2020. Meanwhile, the unemployment rate remained unchanged at 4.1 percent. The Bureau noted that the now-concluded strike at Boeing led to a decline of 44,000 jobs in transportation equipment manufacturing and also acknowledged the potential effects of hurricanes Helene and Milton, stating, "It is likely that payroll employment estimates in some industries were affected by the hurricanes; however, it is not possible to quantify the net effect on the over-the-month change in national employment, hours, or earnings estimates." 

Meanwhile, economists are predicting that the Federal Reserve will cut interest rates by a quarter percentage point on November 7. This meeting follows the release of the September personal consumption expenditures (PCE) price index from the Bureau of Economic Analysis which increased by 2.1% from September of last year. This data reflects continued progress toward steadying inflation near the Federal Reserve's 2% target.

The ESI’s three-day moving average began this two-week stretch at 42.2 on October 23. It then fell to a low of 39.7 on October 26 before rising to 42.8 on October 30. The three-day moving average then decreased to 39.9 on November 1 before rising up to a high of 44.7 on November 5 to close out the session.