Economic Optimism Rose for Third Consecutive Month, According to Latest IBD/TIPP Poll
The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, improved for the third consecutive month. Its April reading of 47.4 rose 1.1% from last month's reading of 46.9. Though the index remained in negative territory for the 20th month, this month's reading secured the new high point since December 2021's 48.4. 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 April index, IBD/TIPP surveyed 1,365 adults March 29-31. 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 returned to positive territory in April, with a 2.4% change. This month's index reading of 50.3 rose from 49.1 in March. Both the Favorability component (52.2) and the Leadership component (48.7) increased by 3.4%, while the Job Approval component inched up 0.6% to hit a neutral 50.0.
The National Outlook Index remained at 46.1 overall for the second consecutive month. Whereas last month five of six index components increased, April's index revealed that only two components improved, while three declined and one did not change. Quality of Life (54.6) and Presidential Leadership (50.3) were in positive territory.
The Financial Related Stress Index showed a 3.5% increase to read 67.9 ? its highest reading in six months. 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).
"There is a lot of good news in this month's numbers, with every component improving or maintaining its previous reading on both the Economic Optimism Index and the Presidential Leadership Index," said Ed Carson, IBD's news editor. "But we still have a way to go to get back to pre-pandemic levels. Several markers remain unstable, and financial-related stress remains an area of concern."
The flagship IBD/TIPP Economic Optimism Index has three key components. In April, two increased 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 41.6 for the second consecutive month.
- The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, stayed in positive territory, ticking up 0.5%. The percentage change moved March's reading from 55.0 to 55.3 this month.
- Confidence in Federal Economic Policies, a proprietary IBD/TIPP measure of views on how government economic policies are working, increased from 44.2 to 45.3, a 2.5% change.
"With the collapse of Silicon Valley Bank and Signature Bank ? along with the threat of several others ? consumers are understandably nervous about their assets. Our polling found that just 61% of Americans are confident in the banking and financial industry, with 59% wanting the federal government to back all bank deposits," said Raghavan Mayur, president of TechnoMetrica, who directed the poll. "People are taking steps to safeguard their money, with 30% of respondents moving funds to more secure institutions, and 24% dividing deposits into smaller chunks for purposes of protection. Consumers appear to have taken some comfort in the government's actions to prevent a crisis, but stress remains high."
Economic Optimism Index Breakdown
This month, 10 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. eight in March, six in February and three in the prior three months. Thirteen groups rose vs. 12 in March, 13 in February, eight in January, 19 in December and nine in November.
For the Six-Month Economic Outlook component, seven of the 21 groups that IBD/TIPP tracks scored in optimistic territory, the same as in March. That's vs. four in February, zero in January and just one in December and November. Optimism over the economy's six-month outlook rose for 11 groups for a second straight month vs. 13 in February, nine in January and 11 groups in November and December.
For the Personal Financial component, 13 groups IBD/TIPP tracks were in optimistic territory vs. 12 in March, 10 in January and February, nine in December and seven in November. Fourteen groups rose vs. 16 in March, 15 in February, nine in January, 15 in December and 12 in November.
For the Federal Policies component, nine of the 21 demographic groups tracked were above 50.0 vs. eight in March, four in February, three in January, two in December and three in November. Twelve groups rose vs. 10 in March, 14 in February, 11 in January, 14 in December and four in November.
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 [email protected].
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