Economic Optimism Index Dips Again as Inflationary Concerns Mount, According to the Latest IBD/TIPP Poll | Financial Buzz

Economic Optimism Index Dips Again as Inflationary Concerns Mount, According to the Latest IBD/TIPP Poll

The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, slipped another 1.3% in August, after dropping 3.7% in July. The index, which moved from 54.3 last month to 53.6 this month, still remains in positive territory — now for the eighth consecutive 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 August index, IBD/TIPP surveyed 1,322 adults from July 28 to July 30. 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.

Despite the dip in the Economic Optimism Index, the Presidential Leadership Index regained some ground in August. After falling 8.0% in July, this index increased 4.3% this month, moving from 56.3 to 58.7. Additionally, each index component increased, with the Job Approval component rising the most at 5.0%. President Biden’s current Job Approval reading is 60.6; it was 64.6 at its peak in February.

The National Outlook Index rose 1.5% in August after a 5.3% decline in July. It moved from 52.3 last month to 53.1 this month. All but two components, Quality of Life (down 1.0% to 58.7) and Economic Optimism (down 1.3% to 53.6) increased this month, with the largest positive change appearing in the Morals and Ethics component (up 5.4% to 45.0).

The Financial Related Stress Index continued to trend negative, however. The index rose by another 2.1%, going from 61.9 last month to 63.2 this month. 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).

“Economic markers remain in positive territory overall, but Americans’ concerns about inflation are growing,” said Ed Carson, IBD’s news editor. “Currently, 82% of people are worried about inflationary pressures, and it’s showing up across the various indexes. In particular, the Personal Financial Outlook and Six-Month Outlook, as well as Financial Related Stress, all of which track how the economy is affecting people at a personal level, took slight hits this month.”

The flagship IBD/TIPP Economic Optimism Index has three key components. This month, two of the three declined.

  • The Six-Month Economic Outlook, a measure of how consumers feel about the economy’s prospects in the next six months, fell by 1.2%, moving from 50.8 in July to 50.2 in August — its lowest reading in six months.
  • The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, moved from 59.7 last month to 57.8 this month — a decline of 3.2%.
  • Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, was the only component to rise, increasing 1.0% after last month’s 7.1% drop. The component moved from 52.4 in July to 52.9 in August.

“COVID-19 and the economy remain at the top of the list of issues facing the country, and the two are inextricably linked,” said Raghavan Mayur, president of TechnoMetrica, who directed the poll. “Amid the latest COVID-19 surge, workers may be forced to make some difficult personal decisions. Right now, 64% of poll respondents say they support employer vaccination mandates, up 3% from last month, but 47% of vaccine resistors indicate they would quit their job if forced to get a shot, compared to the 14% who would get vaccinated if their job depended on it. This is significant because 53% of households still describe themselves as job sensitive, and 42% have at least one member looking for a full-time job. The job market remains strong, but given these perspectives, there could be shifts in the makeup of the workforce as the pandemic rages on.”

Economic Optimism Index Breakdown

This month, 14 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 the same as in July. Eighteen were positive in June, 17 in May and April, 16 in March, 11 in February and eight in January. Eight groups rose this month vs. six in July, 15 in June, seven in May, 14 in April, 19 in March, 13 in February and 12 in January.

For the Six-Month Economic Outlook component, eight of 21 groups that IBD/TIPP tracks scored in optimistic territory vs. nine in July, 17 in June, 13 in May, 15 in April, 12 in March, nine in February and seven in January. Optimism over the economy’s six-month outlook rose among 10 groups vs. 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, 19 groups IBD/TIPP tracks were in optimistic territory vs. 19 in July, 18 in June, 13 in May, 19 in April, 17 in March and February and 19 in January. Just three groups rose vs. 15 in July, 10 in June, nine in May and April, 15 in March, 10 in February and 12 in January.

For the Federal Policies component, 10 of the 21 demographic groups tracked were above 50.0 vs. 12 in July, 17 in June, 13 in May, 16 in April, 14 in March, nine in February and seven in January. Twelve groups rose vs. three in July, 18 in June, four in May, 12 in April, 20 in March, 16 in February and 13 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 www.tipponline.com. To license the IBD/TIPP Poll, please contact IBDlicensing@investors.com.

About IBD

Investor’s Business Daily is the leader in stock research and education. For over 35 years, IBD has helped countless investors around the world make more money in the market and reach their financial goals.

Founded by legendary investor William O’Neil with the goal of democratizing stock investing, IBD provides its customers access to the same type of research Wall Street uses to make big profits. All of IBD’s products and content are based on the CAN SLIM Investing System, which uses historical precedent to identify leading stocks before their big price increases.

IBD helps its customers succeed in the market with its unparalleled stock research and education. IBD’s customers have access to its proprietary research, including market-beating stock lists, exclusive stock ratings and powerful investing tools that help them make more profitable trading decisions. In addition, IBD provides customers with world-class investing education that includes complimentary coaching, interactive webinars, explanatory articles, live workshops and more.

IBD reaches investors around the world via its main website, Investors.com, its suite of digital products (IBD Digital, MarketSmith, Leaderboard, SwingTrader and IBD Live), mobile apps, a weekly print edition, social media and more. To learn more about all that IBD has available, please visit www.investors.com.

© 2021 Investor’s Business Daily, LLC. All rights reserved. Investor’s Business Daily, IBD, CAN SLIM and their corresponding logos are registered trademarks of Investor’s Business Daily, LLC.

Contacts

Carmen Mantalas

GMK Communications for IBD

carmen@gmkcommunications.com

503-997-5987

Opt-into our eNewsletter NOW! For the Latest Trending Financial News Topics in Cannabis, Tech, Biotechs, Precious Metals, Energy, Renewable Energy and much more!