2008 record      

Americans are more upbeat about their own financial prospects than at any point in the past three years, even though they're still not optimistic about the direction of the broad economy, according to the latest IBD/TIPP Poll.

The IBD/TIPP Economic Optimism Index is 47.2 in December, up 1.7 points from November. Consumers haven't fully emerged from a funk that saw the index slide as low as 42 after cresting above the neutral 50 level early in the year.

The gap between how people feel about their own finances and their view of the U.S. economic outlook is at its widest point since early in 2008.

Lower gas prices, a stock-market rebound and better job creation helped boost the Personal Financial Outlook Index to 59.6, up from November's 56.5. The index is at its highest point since 2007, with the exception of two brief spikes around the 2008 and 2012 elections.

Why The Gap Is Widening

Meanwhile, the Six-Month Economic Outlook Index barely edged up to 41.8 from 41.5 last month, having sunk to a two-year low of 36.7 in September.

Why is there such a wide gap in perceptions about the direction of personal finances and the overall economy? Increasing concerns about a terrorist attack could be a partial explanation. The San Bernardino massacre occurred Dec. 2, right in the middle of the polling conducted from Nov. 30 to Dec. 4.

Reports of weak wage growth nationally and big jumps in health insurance premiums and deductibles for 2016 have offset some of the more positive news about job creation. That seems to be reflected in the IBD/TIPP financial stress index, which jumped 4.5 points to 58.9, among the highest levels of the year. Unlike gains in the optimism index, a higher stress index is bad news.

Raghavan Mayur, president of TechnoMetrica, IBD's polling partner, also points to holiday budget strains as a stress point at this time of year.

Mayur added: "Consumers' opinion of the economy is evenly split — 48% think the economy is improving and a similar share of 49% thinks it is not improving. While 56% say that we are not in a recession, 39% believe we are in one."

Small Businesses Stagnate

Dissatisfaction with U.S. government policies also continues to weigh on economic optimism. A gauge of confidence in federal economic policies registered just 40.1 in December, though modestly better than November's dim 38.4.

Like the IBD/TIPP poll, the latest Index of Small Business Optimism from the National Federation of Independent Business also reflects a lack of enthusiasm about the overall economy. The NFIB index fell 1.3 points in November to 94.8, well below the average of 98 over the past 42 years.

"This month's index continues to signal a lackluster economy and shows that the small business sector has no expansion energy whatsoever," said NFIB Chief Economist William Dunkelberg.

He noted excessive inventory levels and a deterioration in earnings trends.

A net 1% of small firms expects sales to decline, the first negative reading since March 2013. But with skilled labor hard to find, a net 20% of employers plan to boost pay, which would match the highest share in 14 years.

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