The latest biweekly reading of the Penta-CivicScience Economic Sentiment Index (ESI) increased 0.6 points to 29.6, continuing its rebound from the previous period. This increase comes amid conflicting economic signals, with stronger-than-expected third-quarter GDP growth alongside rising inflation and a stock market selloff.
—Confidence in making a major purchase increased 0.8 points to 20.6.
—Confidence in finding a new job increased 0.7 points to 26.3.
—Confidence in buying a new home increased 0.2 points to 19.9.
—Confidence in personal finances increased 0.1 points to 50.4.
The Federal Reserve held interest rates steady at 3.75 to 4 percent at its October meeting, following a quarter-point increase in September. The Federal Open Market Committee (FOMC) voted 10–2 in favor of the decision, with both dissenters favoring a quarter-point increase. In its statement, the FOMC noted that economic activity continued to expand at a strong pace, but that both uncertainty and inflation remain elevated. Data released the following day underscored these persistent inflationary pressures, with the Bureau of Economic Analysis (BEA) reporting that the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred measure of inflation, increased 0.5 percent during the month and 3.6 percent year-over-year, up from 3.4 percent in August. Core PCE, which excludes volatile food and energy prices, rose 3.1 percent annually.
The U.S. economy grew at a faster pace than expected in the third quarter of 2026, according to the Bureau of Economic Analysis (BEA). Real gross domestic product (GDP) increased at an annualized rate of 3.4 percent, up from 2.2 percent in the second quarter. Growth was driven by increases in business investment, consumer spending, and government spending, partially offset by declining exports. The acceleration was particularly notable in business investment, reflecting continued spending on equipment and technology, including artificial intelligence infrastructure.
At the same time, U.S. stock markets posted sharp declines during the period as investors raised concerns about the profitability of AI investments. The selloff was driven by technology stocks, after major technology companies’ earning reports intensified concerns about the scale of AI-related spending and return on investment. On October 30, the Nasdaq Composite fell 2.9 percent, its largest single-day decline since June, while the S&P 500 and Dow Jones Industrial Average dropped 1.8 percent and 1.1 percent, respectively.
The ESI trended upward over the past two weeks, despite several fluctuations. It began at a low of 26.9 on October 21 before increasing to 29.4 on October 24. It then fell to 28.1 on October 27 before rising sharply to 30.6 the next day. The three-day moving average then oscillated before rising to a high of 31.5 on November 2. It then fell slightly to 31.0 on November 3 to close out the session.
The next release of the ESI will be on Wednesday, November 18, 2026.
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