The latest biweekly reading of the Penta-CivicScience Economic Sentiment Index (ESI) decreased 0.4 points to 30.6 despite the release of a strong jobs report, the confirmation of a new Fed Chair, and a U.S.-China trade and investment agreement.
Four of the ESI's five indicators decreased during this period. Confidence in buying a new home and confidence in personal finances both decreased by 1.9 points, falling to 23.7 and 49.0 respectively.
—Confidence in making a major purchase decreased 0.6 points to 22.6.
—Confidence in the overall U.S. economy decreased 0.6 points to 30.4.
—Confidence in finding a new job increased 3.0 points to 27.4.
The U.S. economy added 115,000 jobs in April, almost twice as much as analysts predicted, with the unemployment rate holding steady at 4.3 percent. Healthcare, transportation, and retail trade led hiring, while federal government employment continued to decline. Austan Goolsbee, president of the Federal Reserve of Chicago, told CNBC that the report showed the labor market has been "pretty much stable for a year, year and a half," but continued, "I characterize that we've been stable without being good."
President Trump's visit to Beijing this week—the first by a U.S. president since 2017—led to an agreement to establish a U.S.-China Board of Trade and a Board of Investment, two new bilateral institutions designed to manage commerce and investment between the world's two largest economies. China's commerce ministry also stated that the two countries had agreed "in principle" to tariff cuts and reduced restrictions on select agricultural goods and aircrafts. The agreements are preliminary and the new boards are not expected to be formally chartered until Xi's planned visit to Washington this fall.
Kevin Warsh was confirmed by the Senate on May 13 as the new Federal Reserve chair, in a 54-45 vote, the most divisive confirmation in history. Warsh steps in amid persistent inflation and heightened unemployment, with the April Consumer Price Index increasing 0.6 percent on a seasonally adjusted basis and 3.8 percent year-over-year, its highest level since May 2023 and driven largely by elevated energy prices. Investors largely expect the Fed to hold rates steady for the rest of the year.
The ESI's three-day moving average fluctuated over the two-week period before closing just above 31. It opened at 30.3 on May 6 and climbed to a period high of 33.3 on May 10 before falling to a low of 28.4 on May 15. The three-day moving average then rebounded to 32.9 on May 18 before dropping to 31.2 on May 19 to close out the session.
The next release of the ESI will be on Wednesday, June 3, 2026.