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Subjects: Survey, Economic News/Analysis

Economic Optimism Dips Again, According to the Latest IBD/TIPP Poll

The IBD/TIPP Economic Optimism Index, a leading national poll on consumer confidence, today revealed a 1.0% drop from last month's reading. The July index fell to 41.3, down from 41.7 in June. It now sits at its lowest point since November 2022 (40.4) and has been in negative territory for 23 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 July index, IBD/TIPP surveyed 1,341 adults July 5-7. 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 declined across all components for the third consecutive month, dropping 4.6% to 41.6 overall from last month's 43.6. The Favorability component again fell furthest, to a reading of 42.3, down from June's 44.9 ? a 5.8% change. The Leadership component reading remained the lowest overall at 39.9, down 4.8% from June's 41.9.

The National Outlook Index continued its three-month decline, with a reading of 38.5 overall, down 3.0% from June's 39.7. While every component fell in July, the Standing in the World component dropped the most, moving from 36.2 last month to 33.8 this month ? a 6.6% change. Notably, the Morals & Ethics component was 29.9 in July, the lowest reading since January 2021 (28.7), when the White House was transitioning from Trump to Biden.

After two months of modest improvement, the Financial Related Stress Index increased slightly in July, moving from June's reading of 66.8 to this month's 67.1 ? a 0.4% 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 economy continues to be the number one issue for Americans as we prepare for earnings season and new inflation data," said Ed Carson, IBD's news editor. "The Six-Month Economic Outlook was the lone bright spot for July, as optimism slightly increased for the long-term, but it's still a long way from positive. Expect some more twists and turns before consumers trust that the economy has stabilized."

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

"Despite the low 3.6% unemployment rate, Americans continue to lose sleep over the economy," said Raghavan Mayur, president of TechnoMetrica, who directed the poll. "The latest jobs numbers suggest another rate hike is on the way, causing some consumers to hold off on buying a home or car. Our latest data shows that 71% are worried about maintaining their current standard of living. The same number are concerned about retirement savings. There is not a sense of all-out economic calamity, but we're a long way from the sentiment of pre-pandemic days."

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. That's vs. two in June, six in May, 10 in April, eight in March, six in February and three in January. For a second straight month, 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 for a second month in a row. That's 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 14 groups vs. 11 in June, one in May, 11 in March and April, 13 in February and nine in January.

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

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

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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