The latest biweekly reading of the Penta-CivicScience Economic Sentiment Index (ESI) decreased by 1.0 point to 30.9, dropping below its previous low point in the weeks following the April 2025 tariff announcement. The index has now hit its lowest point since July 2022 amid continued economic uncertainty and the federal government shutdown.
Three of the ESI's five indicators decreased during this period. Confidence in making a major purchase decreased the most, falling 2.9 points to 22.5.
—Confidence in the overall U.S. economy decreased 2.3 points to 29.6.
—Confidence in finding a new job decreased 0.5 points to 26.9.
—Confidence in personal finances increased 0.2 points to 50.3.
—Confidence in buying a new home increased 0.6 points to 25.2.
The federal government shutdown, which began on October 1 and remains ongoing, may have lasting effects on the U.S. economy. An official from the Department of Treasury stated that the lost output generated because of the shutdown may cost the economy up to $15 billion per week, and analysis from Oxford Economics states that a shutdown will reduce GDP growth by 0.1 and 0.2 percentage points per week. The shutdown is also continuing to delay the release of key economic data, including the September Consumer Price Index report (CPI) which has now been rescheduled to October 24.
The International Monetary Fund (IMF) released its World Economic Outlook (WEO) report, forecasting a slowdown in global growth to 3.2 percent in 2025, down from 3.3 percent in 2024. These 2025 projections represent an improvement from the IMF's July predictions but are, in total, 0.2 percentage point below forecasts from late 2024. Meanwhile, the Fund projects U.S. economic growth will slow to 2.0 percent in 2025. IMF chief economist Pierre-Olivier Gourinchas noted that these data are "not as bad as we feared, but worse than we anticipated a year ago, and worse than we need."
The Federal Reserve's latest Beige Book report, which provides an anecdotal overview of the economic situation in the Fed's 12 districts, found that economic activity "changed little" since the last report in early September. The Fed noted labor markets remained steady while price pressures intensified across many of the Fed's 12 districts as tariffs contributed to rising costs. While some firms froze prices to retain customers, others fully passed on import costs, particularly in manufacturing and retail sectors. Recent analysis from Goldman Sachs found that American consumers will be most impacted by these tariffs, shouldering 55 percent of the new trade costs this year. Meanwhile, U.S. businesses will take on 22 percent of the costs, foreign exporters will absorb 18 percent, and five percent of the costs will be evaded.
Trade tensions between the U.S. and China have continued to escalate, as President Donald Trump stated on Truth Social he will impose an additional 100 percent tariff on Chinese goods starting November 1. This follows Beijing's announcement of new export restrictions on products made with rare earth minerals, limiting the export products used for military applications and requiring foreign suppliers to obtain government approval to ship products essential in the semiconductor, AI, and EV industries. In response to China’s restrictions, the U.S. and Australia signed a minerals agreement committing more than $3 billion in combined government investments toward critical mineral projects over the next six months.
The ESI's three-day moving average began this two-week stretch at a high of 33.5 on October 8. It then fell to a low of 29.1 on October 11 before trending upward, climbing to 33.1 on October 17. The three-day moving average then oscillated over the following days, ending the session at 31.5 on October 21.
The next release of the ESI will be on Wednesday, November 4, 2025