LOS ANGELES (November 7, 2017) — The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, increased across all measures in November. The overall Economic Optimism reading reached 53.6, its highest mark since March 2017 when it had a reading of 55.3. The index also continues its longest stretch in positive territory in more than a decade.
In addition to the Economic Optimism Index, IBD/TIPP surveyed respondents on key political issues for the Presidential Leadership Index and the National Outlook Index (see separate story here for details). The separate Presidential Leadership Index rose nine percent from October’s 36.5 reading, but remains low at 39.8, versus its long-term average of 49.5. The National Outlook Index rose 8.1 percent to 42.9. For all of the IBD/TIPP indices, a reading below 50 indicates pessimism, while a reading above 50 signals optimism.
The IBD/TIPP Economic Optimism Index has established a strong track record of foreshadowing the confidence indicators put out later each month by the University of Michigan and The Conference Board. IBD/TIPP conducted the national telephone poll of 917 adults from October 26 to November 3 using live interviewers and both cell phone and landline numbers. The margin of error is +/-3.4 percentage points.
“Last month, we saw substantial dips across the board, indicating that Americans were getting anxious about the direction of the country, its leadership, and how that translates to the economy and their personal finances,” said Terry Jones, IBD's Commentary Editor. “This month, we’re seeing a bit of a bounce. While certain numbers remain low, the leading economic indicators stayed strong.”
The IBD/TIPP Economic Optimism Index has three key components. This month, all three index components increased.
- The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, returned to positive territory. After a 4.7 percent drop last month, this component rose 6.4 percent in November to 51.8, its highest reading since March 2017. The component also remains well above its 32.1 reading when the economy entered the last recession in December 2007.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, recovered from its October slide by increasing 3.5 percent. It rose from 59.5 to 61.6.
- Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, saw the biggest jump. After decreasing by 9.1 percent in October, the component rose 10.5 percent in November, climbing from 42.8 to 47.3.
“Americans have a strong conviction in the current economy, and the majority believe the economy will improve further in the months ahead. This month’s rise in optimism largely reflects Americans’ growing confidence in the labor market,” noted Raghavan Mayur, president of TechnoMetrica, IBD's polling partner. “In October, the unemployment rate fell to its lowest level in 17 years. Consumers are also encouraged by record highs in the stock market, as gains in the market have translated into rising retirement account balances. In addition, a number of President Trump’s economic policies, including the proposed tax reform plan, are viewed favorably by many Americans. Also, many see that the appointment of Jerome Powell as the new Federal Reserve Chairman is a safe choice to continue the economic growth.”
This month, 16 of the 21 demographic groups -- such as age, income, race and party preference -- that IBD/TIPP tracks were above 50 on the Economic Optimism Index. That’s up from 11 of 21 the month before. Eighteen groups improved on the index, while two declined and one stayed the same.
On the Economic Outlook component, 13 of the 21 groups that IBD/TIPP tracks scored in optimistic territory. Fifteen groups improved on the component while six declined.
On the Personal Financial component, all of the 21 groups IBD/TIPP tracks scored in optimistic territory. Eighteen groups increased while just three declined.
On the Federal Policies component, six of the 21 demographic groups tracked were above 50. Seventeen groups advanced on the component and four declined.
* * *
ABOUT THE IBD©/TIPP POLL
The IBD/TIPP Economic Optimism Index is the earliest take on consumer confidence each month and predicts with good reliability monthly changes in sentiment in well-known polls by The Conference Board and the University of Michigan. The IBD/TIPP Economic Optimism Index is based on a survey of 900-plus adults chosen at random nationwide. The national poll is generally conducted in the first week of the month by live interviewers and both cell phone and landlines.
ABOUT INVESTOR'S BUSINESS DAILY (IBD)
Investor’s Business Daily is a leading financial news and research organization recognized for providing stock screens, comparative performance ratings, and unique commentary helping investors zero in on top-performing growth stocks. IBD provides the buy rules and sell rules to properly make trading decisions that will minimize your risk and maximize your potential profit. IBD offers individual and professional investors a comprehensive lineup of print and online products, all based on a powerful investing system that has dramatically outperformed the S&P 500.
IBD’s website, Investors.com, offers tools, analysis and research for investors of all levels: IBD University learning center, IBD TV market videos and the IBD Stock Checkup®. IBD also hosts popular investment workshops and provides Home Study programs based on the top-performing growth strategy, CAN SLIM. IBD was founded April 9, 1984, by William J. O'Neil, who also originated CAN SLIM.
© 2017 Investor's Business Daily, Inc. All rights reserved. Investor's Business Daily, IBD, CAN SLIM and their corresponding logos are registered trademarks of Investor's Business Daily, Inc.
For Editorial Contact:
GMK Communications for IBD