Economic sentiment declines again to its lowest point since July 2022
The latest biweekly reading of the Penta-CivicScience Economic Sentiment Index (ESI) decreased by 0.7 points to 30.6 as the longest government shutdown in U.S. history ended on November 12. The ESI declined past the previous yearly low of 30.9 (from two periods ago) to reach the lowest level recorded since July 2022.
Four of the ESI's five indicators decreased during this period. Confidence in finding a new job decreased the most, falling 2.2 points to 24.5.
—Confidence in making a major purchase decreased 1.8 points to 21.6.
—Confidence in buying a new home decreased 0.3 points to 24.9.
—Confidence in personal finances decreased 0.1 points to 49.1.
—Confidence in the overall U.S. economy increased 1.1 points to 33.1.
Despite ending, the consequences of the shutdown are expected to continue to affect the overall U.S. economy, according to the International Monetary Fund (IMF). Julie Kozack, an IMF spokesperson, stated that while the shutdown will negatively affect the economy, it is expected that the impact will be reversed by the first quarter of 2026. Kozack highlighted that "The U.S. economy has proven to be resilient in the past few years" but that "We do now see strains starting to mount."
Additionally, the shutdown has delayed key economic data releases, complicating economists’ ability to assess the U.S. economy. While the September Jobs Report is now scheduled for release this week, it remains uncertain whether the October Jobs Report will be released. White House Press Secretary Karoline Leavitt stated the October Jobs Report is likely never to be released, but Kevin Hassett, director of the White House National Economic Council, later clarified the report will be released, though without the unemployment rate.
In recent weeks, President Donald Trump has rolled back tariffs on certain agricultural and textile products. In an executive order, the president exempted food products, such as coffee, tea, certain fruits, beef, and some fertilizers from reciprocal tariffs. Additionally, the U.S. is working to finalize trade agreements with Ecuador, Argentina, Guatemala, and El Salvador. These agreements, which are anticipated to be finalized in the next couple of weeks, will reduce tariffs on a variety of goods, including food, textiles, and apparel.
Mortgage rates increased slightly over the last two-week period, rising twice after five consecutive weeks of decline. Data from Freddie Mac shows that the average 30-year mortgage rate increased to 6.24 percent during the week ending November 13. Despite this increase, rates remain around their yearly low, offering some relief to homebuyers. Indeed, data from the Mortgage Bankers Association shows that purchase applications rose 6 percent week-over-week, its strongest pace since September.
The ESI's three-day moving average began this two-week stretch at a high of 32.9 on November 5. It then trended downward, falling to a low of 28.8 on November 10. The three-day moving average then rose back up to 32.0 on November 14 before falling to 30.0 on November 16. Finally, it rose to 31.2 on November 18 to close out the session.
The next release of the ESI will be on Wednesday, December 3, 2025.