Latest IBD/TIPP Poll Shows 6.2% Jump in Economic Optimism After Two Months of Decline

National Outlook index rose for the first time since September while the Financial Related Stress index continued to improve

LOS ANGELES--(BUSINESS WIRE)--Released today, the monthly IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, improved by 6.2% over last month. The index reversed a two-month slide by climbing from 40.4 in November to 42.9 in December. The index remained in negative territory, however, for the 16th consecutive month. A reading above 50.0 signals optimism and below 50.0 indicates pessimism on IBD/TIPP indexes.

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 latest index, IBD/TIPP surveyed 1,351 adults December 7-9. The poll was conducted online using TechnoMetrica’s network of 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.

The Presidential Leadership Index dipped a slight 0.7% in December. Its overall reading of 44.6 was down from last month’s 44.9. The Favorability component was the only one to rise this month, moving up 0.7% to 46.3 from 46.0. Each component again remained in negative territory in December.

The National Outlook Index increased by 6.3%, rising from 39.6 in October to 42.1 this month. Several components showed significant jumps. For example, the Morals & Ethics component climbed 14.3% to 35.9 while the Direction of the Country component rose 11.7% to 40.2. Additionally, the Quality of Life component hovered near a return to positive territory with the index’s highest reading at 49.4.

The Financial Related Stress Index also improved in December. The index moved from 67.8 last month to 65.3 this month — a 3.7% change. This is the lowest level of stress recorded since February 2022 (64.2). On this index, a reading over 50.0 equals more financial stress while a reading below 50.0 indicates consumers feel less stress. The index was last below 50.0 prior to the pandemic in February 2020 (48.1).

“We are by no means out of the woods in terms of Economic Optimism, but there are reasons to hope we’re moving closer to the end of the pandemic/post-pandemic roller coaster,” said Ed Carson, IBD's news editor. “Slight shifts were seen in those concerned by inflation and a possible recession. People are still apprehensive, but as they buckle down for the holidays, their longer-term outlook grows a bit more optimistic.”

The flagship IBD/TIPP Economic Optimism Index has three key components. In December, all three increased.

• The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, improved to 37.7 over November’s 34.3 reading — a 9.9% change.
• The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, rose again this month, moving from 48.4 last month to 50.2 in December. This 3.7% change returns the component to positive territory for the first time since September 2022.
• Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, increased 5.4% for a December reading of 40.7, up from 38.6 in November.

“The economy remains Americans’ top concern by a very large margin,” said Raghavan Mayur, president of TechnoMetrica, who directed the poll. “The workforce is changing amid tech layoffs, yet unemployment still sits at just 3.7%, offering some economic security heading into the holidays despite concerns that wage increases are not keeping pace with inflation. With gas prices going down, many hope this signals better days ahead. In fact, 55% of people are confident they’ll make up for their financial losses in 2023.”

Economic Optimism Index Breakdown

This month, three 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, the same as in November. That’s vs. six in October and September, just one in August, three in July, one in June, four in May and seven in April. Nineteen groups rose vs. nine in November,. five in October, all 21 in September, 11 in August, 10 in July, three in June, one in May and 20 in April.

For the Six-Month Economic Outlook component, just one of the 21 groups that IBD/TIPP tracks scored in optimistic territory, the same as in October and November. That’s vs. three in September, none in June to August, just one in May and three in April. Optimism over the economy’s six-month outlook rose for 11 groups for a second straight month. That’s vs. five in October, all 21 in September, 10 in August, 16 in July, five in June, zero in May and 20 in April.

For the Personal Financial component, nine groups IBD/TIPP tracks were in optimistic territory vs. seven in November, nine in October, 13 in September, seven in August and July, six in June, nine in May and 14 in April. Fifteen groups rose vs. 12 in November, three in October, all 21 in September, 11 in August, nine in July, two in June, six in May and 19 in April.

For the Federal Policies component, two of the 21 demographic groups tracked were above 50.0 vs. three in November, five in October, four in September, one in August, two in July, one in June, four in May and six in April. Fourteen groups rose vs. four in November vs. nine in October, all 21 in September, five in July, four in June, one in May and 18 in April.

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 https://tippinsights.com. To license the IBD/TIPP Poll, please contact [e-mail].

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