Latest IBD / TIPP Poll Finds As Inflation Problems Rise, Economic Optimism Dips
Presidential Leadership Index and National Outlook Index drop across components, as financial stress continues to rise
LOS ANGELES, November 02, 2021– (BUSINESS WIRE) – The IBD / TIPP Economic Optimism Index, a leading national survey of consumer confidence, fell a further 6.2% as it continues its five-month decline. The November index fell from 46.8 in October to its current reading of 43.9, keeping the index in negative territory for a third consecutive month. For IBD / TIPP indices, a reading above 50.0 indicates optimism and below 50.0 indicates pessimism.
The IBD / TIPP Economic Optimism Index has established a strong track record by foreshadowing confidence indicators released later each month by the University of Michigan and the Conference Board.
For the November index, IBD / TIPP surveyed 1,306 adults from October 27 to 29. The survey was conducted online using TechnoMetrica’s online panel network to provide the sample. IBD / TIPP also surveyed respondents on key policy issues for the Presidential Leadership Index and the Separate National Outlook Index, as well as the Financial Stress Index.
After a modest rise in October, the Presidential Leadership Index fell again from 51.0 last month to 46.0 this month, a drop of 9.8%. It also pushes the index back into negative territory. The Favorability and Job Approval components fell in double digits, 10.3% and 10.2% respectively, placing all of the index components in negative territory as Favorability (47.1) fell below 50.0 for the first time under Biden’s presidency.
The national outlook index also trended south, with each component falling this month. It fell from 46.8 in October to 42.7 in November, its lowest point since September 2020 (38.4). The country’s leadership fell the most to 10.5%, from 45.9 last month to 41.1 this month.
Despite a slight improvement last month, the financial stress index jumped 5.2% in November. Its reading of 67.3 is now the highest since April 2020 (69.8) – which was the highest since late 2008 amid the financial crisis. A reading above 50.0 equates to more financial stress, while a reading below 50.0 on this index would indicate that consumers are feeling less stress. This index was below 50.0 in February 2020 (48.1).
“Inflationary worries are driving worrying economic trends,” said Ed Carson, editor-in-chief of IBD. “However, labor shortages could start to ease, as people deplete their pandemic-related savings, and we could start to see auto production take a turn. Nonetheless, the current situation may. require Fed intervention to keep inflation from spiraling out of control. “
The flagship IBD / TIPP index of economic optimism has three key elements. This month, all three have declined.
The six-month economic outlook, a measure of consumer opinion on the outlook for the economy over the next six months, fell 6.5% to 38.6, after dropping the last two months to 41.3. This component has now fallen 23.1% since August (50.2).
Personal financial perspectives, a measure of how Americans think about their own finances over the next six months fell 3.7%, from 53.9 in October to 51.9 in November. It is the only component of the index to remain in positive territory.
Confidence in Federal Economic Policies, an IBD / TIPP proprietary measure of opinions on how government economic policies work, fell the most to 9.3%. The index fell from 45.3 last month to 41.1 this month to hit its lowest level since April 2016 (40.3).
“The general confidence of Americans is shaken as inflation expectations are built into everything. It could become a self-fulfilling prophecy,” noted Raghavan Mayur, president of TechnoMetrica, who led the poll. “Only 27% of people think the economy is improving, while 83% are worried about inflation. In fact, 70% say they will cut back on giveaways this holiday season because of these concerns.”
Breakdown of the economic optimism index
This month, only three of 21 demographic groups – such as age, income, race, and party preferences – that IBD / TIPP tracks were above 50.0, in positive territory, on the index of economic optimism. This is down from eight in September and October, 14 in August and July, 18 in June, 17 in May and April, and 16 in March. Three groups increased this month from six in October, just one in September and August, six in July, 15 in June, seven in May, 14 in April and 19 in March.
For the six-month economic outlook component, two of the 21 groups monitored by IBD / TIPP obtained scores in optimistic territory compared to four in October, five in September, eight in August, nine in July, 17 in June, 13 in May, April 15 and March 12. Optimism over the six-month economic outlook increased in three clusters from 11 in October, zero in September, 10 in August, just one in July, 15 in June, nine in May, 15 in April and 18 in March.
For the personal finance component, 11 IBD / TIPP groups were in optimistic territory compared to 16 in September and October, 19 in August and July, 18 in June, 13 in May, 19 in April and 17 in March. Three groups rose after eight in October compared to three in the previous two months, 15 in July, 10 in June, nine in May and April and 15 in March.
For the Federal Policy stream, three of the 21 demographic groups tracked were greater than 50.0 compared to eight in October, nine in September, 10 in August, 12 in July, 17 in June, 13 in May, 16 in April and 14 in March . Only four groups increased compared to three in October, two in September, 12 in August, three in July, 18 in June, four in May, 12 in April and 20 in March.
ABOUT IBD©/ TIPP SURVEY
The IBD / TIPP Economic Optimism Index is the first assessment of consumer confidence each month and reliably predicts monthly sentiment changes in well-known Conference Board and University of Michigan polls. The IBD / TIPP Economic Optimism Index is based on a survey of approximately 1,300 adults using a network of online panels. The national ballot usually takes place the first week of the month.
For more information, visit www.tipponline.com. To obtain a license for the IBD / TIPP survey, please contact [email protected]
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