Latest IBD/TIPP Poll Shows Economic Optimism in Negative Territory for Second Straight Month

October 5, 2021 10:00 AM EDT

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Presidential Leadership and National Outlook Indexes benefit from a slight uptick after September’s massive slide

LOS ANGELES--(BUSINESS WIRE)-- The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, declined for the fourth consecutive month. The October index fell another 3.6% after September’s 9.5% drop, moving from 48.5 last month to 46.8 this month, and remaining in negative territory for a second straight month. For the IBD/TIPP indexes, a reading above 50.0 signals optimism and below 50.0 indicates pessimism.

The IBD/TIPP Economic Optimism Index has established a strong track record of foreshadowing the confidence indicators issued later each month by the University of Michigan and The Conference Board.

For the October index, IBD/TIPP surveyed 1,308 adults from September 29 - October 2. The poll was conducted online using TechnoMetrica’s network of online panels to provide the sample. IBD/TIPP also surveyed respondents on key political issues for the separate Presidential Leadership Index and National Outlook Index as well as the Financial Related Stress Index.

After plummeting 15.8% in September, the Presidential Leadership Index increased 3.1% in October-- enough to move President Biden’s approval rating back into positive territory. Each component of the index rose, bringing the overall reading up to 51.0.

The National Outlook Index also increased slightly (0.6%). It moved from 46.5 in September to 46.8 in October. The Direction of the Country component rose the most at 3.7%, while the Morals and Ethics component declined for the second consecutive month, reaching its lowest reading (39.7) since Biden’s first month in office (39.5).

The Financial Related Stress Index declined in October, breaking a five month streak of increased stress. The index moved from 64.9 in September to 64.0 in October-- a 1.4% decrease. A reading over 50.0 equals more financial stress while a reading below 50.0 on this index would indicate consumers feel less stress. This index was last below 50.0 in February 2020 (48.1).

“Inflation is still a concern on many people’s minds, and many simply don’t believe the economy is improving -- which is an important issue to them,” said Ed Carson, IBD’s news editor.

The flagship IBD/TIPP Economic Optimism Index has three key components. This month, two declined and one did not change.

  • The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, remained at 41.3 for the second straight month. This is its lowest reading since August 2020.
  • The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months declined by 2.0%, moving from 55.0 in September to 53.9 in October.
  • Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, declined another 8.4% to 45.3 in October after last month’s 7.2% stumble. This marks its lowest reading since December 2020.

“Consumers have not found a lot to get excited about so far this month. The jobs report was weaker than expected, and a lot of division still exists on COVID-19 vaccines, particularly when it comes to mandates,” said Raghavan Mayur, president of TechnoMetrica, who directed the poll. “With a number of domestic policies up for a vote in the coming weeks, and as we head into fall weather, which could trigger further COVID spread as well as flu, sentiment will be tested in a big way.”

Economic Optimism Index Breakdown

This month, eight of 21 demographic groups — such as age, income, race and party preference — that IBD/TIPP tracks were above 50.0, in positive territory, on the Economic Optimism Index. That’s equal to September but below the 14 in August and July, 18 in June, 17 in May and April and 16 in March. Six groups rose this month vs. only one in September and August, six in July, 15 in June, seven in May, 14 in April and 19 in March.

For the Six-Month Economic Outlook component, four of 21 groups that IBD/TIPP tracks scored in optimistic territory vs. five in September, eight in August, nine in July, 17 in June, 13 in May, 15 in April and 12 in March. Optimism over the economy’s six-month outlook rose in 11 groups vs. zero in September, 10 in August, just one in July, 15 in June, nine in May, 15 in April, 18 in March, 15 in February and 14 in January.

For the Personal Financial component, 16 groups IBD/TIPP tracks were in optimistic territory for a second straight month vs. 19 in August and July, 18 in June, 13 in May, 19 in April and 17 in March. Eight groups rose after just three in the prior two months, 15 in July, 10 in June, nine in May and April and 15 in March.

For the Federal Policies component, eight of the 21 demographic groups tracked were above 50.0 vs. nine in September, 10 in August, 12 in July, 17 in June, 13 in May, 16 in April and 14 in March. Just three groups rose vs. two in September, 12 in August, three in July, 18 in June, four in May, 12 in April and 20 in March.

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 about 1,300 adults conducted using a network of online panels. The national poll is generally conducted in the first week of the month.

For more information, go to www.tipponline.com. To license the IBD/TIPP Poll, please contact IBDlicensing@investors.com.

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Carmen Mantalas
GMK Communications for IBD
carmen@gmkcommunications.com
503-997-5987

Source: Investor’s Business Daily, LLC



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