Latest IBD/TIPP Poll Shows Economic Optimism Sees Little Improvement One Month After Freefall

The Presidential Leadership and National Outlook indexes continue to decline

LOS ANGELES--(BUSINESS WIRE)--The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, today revealed that economic optimism rose a cautious 0.2% in June after last month’s 12.2% drop. This month’s reading of 41.7 was up overall from May’s 41.6. The index has now been in negative territory for 22 consecutive months. 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 June index, IBD/TIPP surveyed 1,358 adults May 31-June 2. 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 fell another 5.8% in June, after May’s 8.0% drop, taking the reading from 46.3 last month to 43.6 this month. All index components declined, with the Favorability component experiencing the biggest dip. It moved from May’s 48.0 to June’s 44.9 – a 6.5% change. And consistent across the Biden presidency, Leadership continued to yield the lowest reading of all components at 41.9, down from 43.9 last month.

The National Outlook Index declined by 3.6%, following May’s significant drop (10.6%). The Morals & Ethics component took the greatest hit, tumbling from last month’s 33.2 to 30.4 this month – an 8.4% change. This is notable, given May’s 13.5% drop. The only month of Biden’s presidency that has scored lower on this measure was August 2022, with a reading of 30.1.

The Financial Related Stress Index again improved slightly, moving from May’s reading of 67.2 to June’s 66.8 – a 0.6% change. 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).

“The run up to the U.S.’ potential default undoubtedly caused stress and distrust over the last month, but consumers saw the ice thaw in negotiations towards the end of May, ultimately leading to resolution,” said Ed Carson, IBD's news editor. “Still, only one quarter (25%) of Americans believe the economy is improving and 89% remain concerned about inflation. Although the Personal Financial Outlook component ticked up in June, people are a long way from feeling comfortable with the state of the economy.”

The flagship IBD/TIPP Economic Optimism Index has three key components. In May, two components declined and one increased.

• The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, dipped from 34.6 in May to 34.5 in June – a 0.3% change.
• The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, was the only component to improve. It was also the only component in positive territory, with a reading of 51.9, up 3.6% from last month’s 50.1.
• Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, fell another 3.5%. Its June reading of 38.6 was down from May’s 40.0.

“Even though the debt ceiling issue is resolved until after the next election, financial instability continues to be the theme of 2023,” said Raghavan Mayur, president of TechnoMetrica, who directed the poll. “The Fed’s rate hike guessing game and an unsteady banking industry have consumers worried, despite a strong labor market. They’re wondering if the worst is over or if we’ll plunge into a recession. As it stands, 69% are worried about maintaining their current standard of living and if they’ll have enough savings for retirement.”

Economic Optimism Index Breakdown

This month, two 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 vs. six in May, 10 in April, eight in March, six in February and three in January. Nine groups rose vs. zero in May, 13 in April, 12 in March, 13 in February and eight in January.

For the Six-Month Economic Outlook component, none of the 21 groups that IBD/TIPP tracks scored in optimistic territory, vs. one in May, seven in March and April, four in February and zero in January. Optimism over the economy’s six-month outlook rose for 11 groups vs. one in May, 11 in March and April, 13 in February and nine in January.

For the Personal Financial component, 11 groups IBD/TIPP tracks were in optimistic territory vs. nine in May, 13 in April, 12 in March and 10 in January and February. One group rose vs. two in May, 14 in April, 16 in March, 15 in February and nine in January.

For the Federal Policies component, one of the 21 demographic groups tracked was above 50.0 vs. five in May, nine in April, eight in March, four in February and three in January. Eight groups rose vs. three in May, 12 in April, 10 in March, 14 in February and 11 in January.

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 email [e-mail].

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