Mar 3, 2021 - Economy

Economic sentiment jumps as COVID-19 recedes

Data: Hamilton Place Strategies, CivicScience; Chart: Axios Visuals
Data: Hamilton Place Strategies, CivicScience; Chart: Axios Visuals

Americans' feelings about the economy are turning up, according to the latest confidence survey from Hamilton Place Strategies and CivicScience, provided first to Axios.

What happened: After two months of decreasing, economic sentiment climbed 2.2 points to 49.6, as COVID-19 cases, business restrictions and deaths continued to decline, while restaurant openings and vaccination numbers moved higher.

Details: All five of the Economic Sentiment Index's indicators rose last week, with a surge of 5.6 points in confidence in the U.S. economy, which rose to 55.4, its largest spike since September 2020.

  • Confidence in the job market also hit its highest level since September, increasing 1.9 points to 43.1.
  • The consumer indicators of confidence in personal finances and making a major purchase rose 1.9 and 1.8 points, respectively. Confidence in the housing market increased slightly, moving up 0.1 point to 49.4.

One level deeper: "Easing of restrictions is being reflected in a fading of weakness in the OpenTable restaurant series," TD Bank strategists said in a note to clients.

  • It is now down 39% year over year, a notable improvement from -52% a month ago.
  • The Opportunity Insights credit card transactions data series shows net strengthening this year, even with some weakening since early January, and mobility data from Google are also signaling some strengthening, TD notes.

State of play: "All in all, the recovery appears to be regaining momentum, albeit with a long way to go; payrolls are currently down 9.9 million from their pre-COVID level."

Of note: Improving consumer confidence numbers along with better-than-expected retail sales figures pushed the New York Fed's index of real-time economic indicators slightly higher this week.

  • The Atlanta Fed's GDPNow forecasting tool is indicating U.S. growth could see a 10% gain for the first three months of the year.
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