The latest biweekly reading of the Penta-CivicScience Economic Sentiment Index (ESI) increased by 0.4 points to 31.3, remaining near an all-time-low as the government shutdown continues.
Two of the ESI's five indicators increased during this period. Confidence in the overall U.S. economy increased the most, rising 2.4 points to 32.0.
—Confidence in making a major purchase increased 0.9 points to 23.4.
—Confidence in buying a new home remained at 25.2.
—Confidence in finding a new job decreased 0.2 points to 26.7.
—Confidence in personal finances decreased 1.1 points to 49.2.
The federal government shutdown, now ongoing since October 1, poses potential risks to overall economic activity in the United States. A recent report from the Congressional Budget Office (CBO) found that after four weeks, the government shutdown has likely cost the U.S. economy $7 billion, a figure that could grow to $14 billion in permanently lost gross domestic product (GDP) if the shutdown hits eight weeks. The shutdown also continues to delay the release of key economic data, including the initial estimate for GDP for the third quarter of this year.
On October 29, the Federal Reserve lowered the target range for the federal funds rate by 0.25 percentage points to between 3.75 and 4 percent. Ten of the 12 voting members of the Federal Open Market Committee (FOMC) voted for the quarter-point cut, with Fed Governor Stephen Miran dissenting in favor of a half-point cut and Kansas City Fed President Jeffrey Schmid dissenting in favor of no cut at all. Heather Long, chief economist at Navy Federal Credit Union, told CNBC that two diverging dissents were "unusual" because one FOMC participant wanted a deeper cut and the other wanted to keep the rate steady.
During his press conference, Fed Chair Jerome Powell emphasized internal divisions over the path of monetary policy, signaling that a rate cut in December is not a "foregone conclusion" due to "strongly differing views about how to proceed." He also noted how diminished data availability due to the ongoing government shutdown could lead the Fed to adopt a more cautious stance on further rate reductions.
Also on October 29, President Donald Trump announced a deal with China to temporarily lower certain tariffs on Chinese goods in return for China suspending export controls on rare earth minerals. Additionally, China committed to halting the flow of fentanyl precursors into the United States, ending harmful trade practices against U.S. semiconductor and other major firms. It also agreed to purchasing more U.S. soybeans and other agricultural exports.
Mortgage rates have dropped for the fourth straight week, with Freddie Mac reporting that the average 30-year fixed rate fell to 6.17 percent, its lowest level in over a year. Sam Khater, Freddie Mac's Chief Economist, stated in a press release that "the last few months have brought lower rates and homebuyers are increasingly entering the market."
The ESI's three-day moving average began this two-week stretch at 31.9 on October 22. The moving average then fell to 29.9 on October 25, before steadily rising to 32.5 on October 28. After stabilizing for a couple days, the moving average fell to a low of 29.3 on November 1, before ending the session at a two-week high of 32.9 on November 4.
The next release of the ESI will be on Wednesday, November 18, 2025.